Vol. 363 No. 10
asked the Minister for Industry, Trade, Commerce and Tourism if he is aware that the value of Irish exports has been offset by the outflow of expatriated funds by manufacturing exporters with the result that our increased exports have added little to extra employment or national income; and the steps he proposes taking to get a better return in national economic terms from our exports.
34.
asked the Minister for Industry, Trade, Commerce and Tourism the detailed Government initiative being taken as a matter of policy to insure that the Irish workforce benefits to the fullest extent of the value of our exports, in particular (a) transfer pricing, (b) areas of operation, (c) manner in which it operates and (d) initiative to attain the maximum benefits possible for jobs and living standards.
I propose to take Questions Nos. 31 and 34 together since they are both concerned with the need to maximise the return, in national economic and employment terms, arising from the increase in the level of manufactured exports.
I am aware of the level of repatriated profits by subsidiaries of overseas manufacturing firms operating in Ireland and of the high level of export activity engaged in by those companies. As regards repatriations, I should stress that these are not only profits in the conventional sense but include dividends, royalties, interest payments and remuneration of the costs of research and development and marketing incurred elsewhere. The level of repatriated profit must be viewed in the context of the total benefits to the Irish economy of such firms. A recently published IDA survey showed that in 1983 approximately 80,000 people were directly employed by about 800 overseas firms and their purchases of Irish materials and services were in excess of £2,000 million.
The White Paper on Industrial Policy outlined the policies which are being pursued to maximise the benefits to the Irish economy of overseas firms establishing here. These policies include:
(a) the national linkage programme which is designed to increase local purchases of materials and services by overseas firms; and
(b) the intensification by the State industrial promotion agencies of their efforts to encourage overseas firms to reinvest more of their profits in Ireland.
I should add that the possible terms for issue of tax free securities to foreign owned companies in accordance with the enabling provisions in the Finance Act, 1985, have been under investigation by the Minister for Finance in consultation with the interests concerned and I understand that the Minister's decision in this matter will be available very shortly.
Could the Minister of State inform the House what the estimated expatriated funds amounted to last year?
I have not the figure for the full year at this time but I will make inquiries and when it becomes available I will let the Deputy have it.
It is regrettable that he has not got it because it was central to the question. Will he agree that perhaps the expatriated funds of multinationals last year might be as high as £1 billion? Would he accept that that is a reasonable figure?
I cannot give a precise figure. I am not trying to avoid replying. I simply have not the figure in my file. I know the figure seemed high for the first half of 1985. That was in response to a question put down by Deputy O'Kennedy to the Minister for Finance.
How much was that?
For the first half it was £658 million.
For the half year?
For the first half, yes, that is so.
Is the Minister of State aware that substantial Irish companies are also involved in keeping the profits offshore?
That is not part of the question put down to me. I am sure it will be very difficult to compile information on activities of overseas companies even where the parent company is in Ireland. However, if the Deputy puts down a separate question. I will try to elicit the information for him.
It was incorporated in the question when I referred to manufacturing exporters. It is a straight question. It would appear from the figures the Minister of State has given that in excess of £1 billion is going out of this country each year from profits made in this country. I am suggesting and asking the Minister of State to confirm that substantial moneys are also being placed offshore by Irish owned companies to the detriment of the national income of this country. Is the Minister of State aware of it? What does he propose to do to plug that hole?
I cannot answer the latter part of the question and I am sure it would be more relevant to the Minister for Finance. In relation to the question of repatriation of profits by subsidiaries of overseas manufacturing firms operating in Ireland, I have stressed in the reply that these are not only profits in the conventional sense. They include dividends, royalties, interest payments and remuneration of the cost of research and development and marketing incurred elsewhere. We must realise that we are a developing economy. We depend on a substantial amount of investment, also investment that will reflect investment already taken abroad in research and development and in the development of new techniques. Is the Deputy suggesting that because there is a repatriation and a payment for these services we should not be pursuing the policy of attracting international companies to Ireland? If he is, I must disagree with him fundamentally.
I am all for that.
Deputy Lyons has a question down also.
When the leader of this party appoints me to the position of a Ministry in the near future I will be happy to answer that question.
It will be a long time; you might have to ask Dessie.
Arising from what I can only describe as an unsatisfactory reply——
From a 23 per cent party the Minister of State should talk like that all right.
——to my question, Question No. 34, would the Minister of State not agree that when one reads the ESRI report which indicates that we had an increase of 10.25 per cent of value in manufacturing industry and an increase of 6 per cent in volume in 1985, it is clear that the full effect of this is not being shown considering the manner in which unemployment has increased? I wish to reiterate the question. What are the Government proposing to do about that? Are they prepared to allow it to continue?
I am not quite sure about an element of the Deputy's question, but I can say that we have been successful in attracting major overseas industry to the country which is giving employment to about 80,000 of our workforce. Our high technology industries are, of necessity, not particularly labour intensive but they are vital to the development of the industrial infrastructure of this country. Indeed, the increases in exports in recent years and the effect on the balance of payments have been nothing short of dramatic and I am sure the Deputy will appreciate that that is the case. The number of new industries established in his own city of Cork in recent years has been substantial, and these are new industries involved in the high technology area.
I am glad the Minister of State mentioned Cork and jobs. If, as he seemed to suggest in his reply, he is of the opinion that we in Cork have recovered from job losses by the few that have been provided——
I never said that.
——then I am afraid that is not answering my question either.
We should not be argumentative.
I am not the one who started the argument. However, I am prepared to take on an argument at any time about the loss of jobs and the need for jobs in the Cork area.
Good boy.
