asked the Minister for Finance whether he is aware of a statement (details supplied) made by the chairman of a major Irish industrial group indicating that one of the major reasons for the group in question seeking investment opportunities abroad was the condition of the market sector of the Irish economy and the prospective profitability of investment here; and if he will make a statement on the matter.
Ceisteanna—Questions Oral Answers - Industrial Group's Foreign Investment.
2.
I am aware of the statement to which the Deputy refers. While I do not wish to understate the problems of low profitability and high costs within the Irish economy, nevertheless it also needs to be recognised that manufacturing output last year is estimated to have increased by 11 per cent and that many firms within the market sector of the economy are continuing both to be profitable and to invest those profits in expanding productive capacity in Ireland. This year's budget was designed, within the constraints imposed by the need to continue with the necessary adjustments to the public finances, to improve confidence and to boost economic activity. I would stress in particular the changes which were introduced in the income tax and VAT systems. As I said in my Financial Statement, these will unquestionably improve the climate for enterprise, effort and employment.
Is the Minister aware that some major domestic companies have taken a deliberate decision to invest outside Ireland rather than in this economy, that in particular some major construction companies are engaging up to about 85 per cent of their investment programme outside the country merely in order to maintain a skeleton activity in Ireland? Is the Minister not aware that some of the major enterprises, banking and financial institutions, are investing a very high proportion of their funds outside the country? In these circumstances is the Minister prepared at least to acknowledge that the policies being pursued by the Government in the past two years are the direct cause of this haemorrhage of investment to places outside the country?
I am aware, as is every other Member of the House, that a number of Irish companies are investing abroad for a multiplicity of reasons, some of those reasons going back for a number of years. Perhaps even Deputy O'Kennedy would agree that we should be happy that some Irish companies are able to make advances on markets elsewhere. I see nothing wrong with an Irish based multinational company. The more we have of them the better. Other companies are investing abroad because they do not foresee the immediate prospect of growth in their activities within this economy. Their judgments are based on the state of the market and the market is in a certain state for a number of different reasons, not the least of which is the fact that, despite the difficulties we must face, we have maintained a higher level of economic activity during many years than might have been justified strictly by the condition of the economy.
I, too, welcome the fact that some Irish companies are proving their maturity and their capacity to diversify abroad but I am asking whether the Minister is concerned that some of those companies are forced to invest abroad because of the market conditions here. I suggest that regarding the construction industry, for instance, the market condition is almost exclusively a consequence of Government policy. This is reinforced by the fact that other countries, notably the Isle of Man are holding major investment conferences in Ireland in an effort to attract money from here to a climate that is better for investment. Ordinary Irish investors are investing huge proportions of their potential outside the country. The Minister must be aware of that fact and must move to correct it as quickly as possible.
The Deputy is flying in the face of facts, as he knows very well, in trying to indicate that the market for construction activity here is determined exclusively by Government policy. That is not the case, so to the extent that the Deputy's contentions are based on that, they are wrong. On the other point raised by the Deputy, I agree that people involved in investment institutions will prospect for markets anywhere they think they can find them but it is rather curious that today we are discussing the matter in the terms in which Deputy O'Kennedy has raised it, when yesterday a colleague of his was asking me if I would consider some further relaxation in our exchange control regulations.
We must move to the next question. We are not engaging in questions now but in a debate across the floor of the House.
In relation to exchange control, does the Minister not recall that yesterday I specifically asked him — and I should be judged on what I say——
We are not going back on yesterday.
I asked him to consider strengthening exchange controls to ensure that this haemorrhage which is a major problem for investment did not continue. There is no inconsistency in what I have said.
Has the Minister figures in respect of the number of firms who have relocated abroad in the past two or three years?
No. I am personally not aware of any firm that has relocated abroad.
I am afraid that tells the whole story.
I think Deputies on the opposite side should choose their terms a little better than they do.