asked the Minister for Trade, Commerce and Tourism the measures he proposes to take to support the flagging tourist industry, with particular reference to the hotel industry.
Ceisteanna—Questions. Oral Answers. - Tourist Industry.
7.
I would not accept the Deputy's view that the tourist industry is a "flagging" industry. Results for the first nine months of this year indicate a level of activity on a par with 1982 with increased numbers of visitors coming from the United Kingdom and Federal Republic of Germany in particular. On 4 May of this year, in reply to a similar Dáil Question from the Deputy, I outlined the actions taken by the Government in 1983 in support of the industry. I will continue to keep the situation under review and to explore ways by which further measures to assist competitiveness might be achieved.
In this context, a recent submission to Government from the Irish Hotels Federation is currently under examination.
Could the Minister indicate to the House the total grant-in-aid from Government resources to Bord Fáilte this year and what proportion was allocated to promotional activities as distinct from administrative costs?
In 1983 a total of £21,057,000 was made available to Bord Fáilte for administration, promotion and marketing; that constituted an additional £2,931,000 over the 1982 allocation. The Deputy will appreciate that, in a year in which it was necessary for the Government to restrict many activities, that increased allocation to Bord Fáilte was a clear indication of their commitment to the tourist industry and has had a substantial effect on the industry.
If I might just give the Deputy some information: In 1982 tourism earned a total of £747 million, an increase of 17 per cent in current terms over 1981. The total revenue from out-of-State tourism in 1982 amounted to £487 million and from Irish people holidaying at home £260.3 million. The total number of visitors from out-of-State came to 2.25 million, constituting an increase of 3 per cent over 1981. Bearing in mind the difficult economic climate, the tourist industry has performed remarkably well and continues to show very considerable resilience.
I am thankful to the Minister for those figures. But the major thrust of my question was that there was some disquiet being expressed recently as to the amount of money from the grant-in-aid that is designated to promotional work as against administrative costs. The Minister may not have that information in his brief. Perhaps he could send it on to me later. While tourism has held its own very well in 1983 would the Minister not accept that over half the hotels of the country have lost money during the current season and that any of the measures he outlined earlier this year to relieve the situation have not had the desired effect? I am anxious to know what new initiatives he is prepared to take to help the hotel industry in its present crisis.
As I indicated to the Deputy, a submission from the Irish Hotels Federation is under consideration at present. While I accept that the hotel industry has been going through a very difficult time recently I should point out that there was a reduction in the VAT rate on hotel accommodation which was widely welcomed by the industry. It must be realised also that the hotel industry is extremely important but that it represents only approximately 17 per cent of the total tourist industry. Therefore, the tourist industry as a whole could not be judged solely on its hotel aspect.
One last question ——
A final supplementary, Deputy.
It is important — while I know the Minister may not be experiencing the happiest of days — that I place on the record that there was no real reduction in the VAT rate to hotels by the Minister and his Government. It had been 18 per cent. They left it at what is was when Fianna Fáil were in power. On behalf of hotels, I would ask the Minister to implement the employment incentive scheme on the same terms as obtained during Deputy Gene Fitzgerald's term of office rather than the rather restrictive way it was applied this year and which was of no benefit at all to the hotels industry. In his review of the allocation for next year would the Minister endeavour to bring about new initiatives that would incorporate the old employment incentive scheme system and also consider new arrangements in so far as pricing and VAT are concerned for the whole of the industry?
As I am sure the Deputy will appreciate, the question of VAT and related matters will be for the Minister for Finance in his budgetary considerations. I am aware — and I have expressed this on a number of occasions — that the high level of VAT is creating a problem for the hotel industry.
Is the Minister aware that VAT rates imposed on hotels are the highest in Europe? Because of this many people have become unemployed in the past year; I have been given a figure of 20 per cent. Would he ask the Minister for Finance to give a vast reduction in the rates of VAT being charged?
I accept the importance of the tourist industry and that it is highly labour intensive. As the Minister responsible, I have publicly identified areas which were causing difficulties in the industry. With regard to Deputy Flynn's comment that no reduction had been made in VAT, I can only say that is not the attitude which has been adopted by the hotel industry. In fact, they were kind enough to express their appreciation in writing for the reduction that was made.
Is the Minister for Finance going to reduce the VAT rate?
As I explained to the Deputy, the question of VAT will be considered in the context of the budget.
We will be holding the Minister to his commitment.