Private Members' Business. - Role of Semi-State Sector: Motion (Resumed).

Debate resumed on the following motion:
Dáil Éireann reaffirms its support for an efficient and effective semi-State sector as a major instrument of economic development and the provision of employment and deplores recent Government statements to the contrary.
—(Deputy Wilson.)

By agreement, and notwithstanding anything in Standing Orders, Members shall be called during Private Members' time this evening as follows: 7.30 p.m. to 7.50 p.m. Government speaker; 7.50 p.m. to 8 p.m. Fianna Fáil speaker; 8 p.m. to 8.10 p.m. Fianna Fáil speaker; 8.10 p.m. to 8.15 p.m. Progressive Democrats speaker; 8.15 p.m. to 8.30 p.m. Fianna Fáil speaker.

Is that list of speakers agreed to?

No. For the second week running no time has been allocated to me on this matter. Last week I was told it was because I did not have an amendment down. This week I do have an amendment down and I am asking that at least five minutes be allocated.

On a point of order, we are agreeable to giving five minutes of our time, from 8.15 to 8.20 p.m., to Deputy De Rossa.

Is the schedule of speakers as read out by the Minister of State at the Department of the Taoiseach agreed to subject to five minutes being allowed to the Workers' Party? Agreed.

One of the significant achievements of this Government has been to carve out a new approach to the development of commerical State enterprise which has been both constructive and consistent.

The Government are not anti-public enterprise, ideologically or otherwise; nor could they be. The Labour Party regard the development of a commercial State sector as the key to the long term creation of wealth and jobs in our economy. Through our participation in this Government we have contributed to a recognition of the significance of the State company as a social enterprise with responsibility to the community and, in particular to their own immediate workforce. State enterprise has, over several decades, made a vital contribution to the development of our economy. The Labour Party have ensured that this economic contribution has been augmented by giving to State companies a pioneering role in the development of new management techniques.

I welcome the pamphlet recently published by the Irish Congress of Trade Unions, "Public Enterprise — Everybody's Business". The record of the Labour Party in Government confirms the unity of purpose within the labour movement in sustaining and promoting public enterprise that is efficient, dynamic and growing.

In the past four years the Government have identified a key role for public sector companies in the creation of wealth and jobs in our economy. What has distinguished our approach from that of previous administrations is that we have not at any stage been content to settle for a "Government as caretaker" policy.

Recently, the notion of public enterprise as a viable economic instrument has come under unrelenting attack. The value of its contribution to growth, jobs and wealth creation has been increasingly disparaged in an opportunistic way by the Progressive Democrats. While it is difficult as always to identify a coherent ideological stance on the part of Fianna Fáil, their new found interest in developing public enterprise is as surprising as it is welcome — that is, of course, if the commitment is genuine.

Fianna Fáil have traditionally adopted the classical caretaker approach to State enterprise. They have tolerated its presence as a necessary evil. Public enterprises were developed by Fianna Fáil in an ad hoc fashion where it was acknowledged that private enterprise could not or would not do the job or provide the essential services which were needed in a developing economy. Their new found conversion, which I welcome, to the notion of treating public enterprise as an efficient and effective instrument of economic development is to be commended. I thank them for putting down this motion for debate.

I would earnestly hope that they will, in the future, further endorse the coherent approach which this Government have adopted to public enterprise and will not revert to their old policy of "out of sight, our of mind", except when it comes to making appointments to the boards of these companies.


The primary emphasis of this Government has been to develop a modern industrial sector with emphasis on commercial viability and profits. We have been obliged to take account of the fact that many State enterprises have experienced serious difficulties in recent years. These have arisen partly, as in the rest of the economy, from the effects of recession and adverse cost movements, and partly from lack of investment and a strategy for growth and development in this sector over a significant number of years.

We have also taken account of the fact that State companies have responsibilities and objectives which oblige them to pursue lines of action which they would not follow if profit-making was their sole objective. These social objectives were not, hitherto, clearly spelt out in the context of national planning. This gave rise to confusion as to how social objectives might be balanced with the necessity for State enterprises to take due account of the commercial reality of the economic enviornment in which they must operate.

The boards, management and workers in State enterprises are directly accountable in economic decision-making affecting their future. There is no place for an expectation on their part that Government must automatically in the end support clearly non-viable operations or countenance a lack of flexibility in adapting to modern market conditions. In the Government's view, commercial public enterprise has a key role to play in the future. This has meant addressing the weaknesses that became apparent in many of our State enterprises and taking appropriate action to remedy deficiencies so identified.

The Labour Party's commitment to the development of a vibrant State sector is underlined by our achievement in having the National Development Corporation established. The corporation will make a very significant contribution towards unleashing the job creation potential which exists in so many areas of enterprise, especially natural resources, which have remained substantially untapped. The corporation have the scope and the potential to become involved in natural resource-based industry, in stimulating the development of food processing in forest products and in high technology projects. Since the Opposition now wish to reaffirm in a most timely manner their support for an efficient and effective instrument of economic development, they must surely now be prepared to endorse the concept and the necessity for the National Development Corporation and presumably as a consequence give a clear commitment that it will be maintained if there is a change of Government and honour the request made by the president of Congress, Mr. John Carroll, to the Fianna Fáil Party in this regard.

At all stages in the past four years, the Government have taken action to secure the viability of our respective State companies, something which was not easy to do but which was a necessity if those companies were to survive and prosper. We have grasped the nettle: in this context, I would direct the attention of the House to my own experience with the Great Southern Hotels, known as the OIE group. I would remind the House that the option facing this hotel chain at the end of 1983 was liquidation, massive redundancies and a major blow to our tourist industry. Instead, this Government took the hotels into public ownership as a semi-State enterprise under my aegis. The board of OIE, the management and the workforce have brought off a remarkable achievement in a short space of time and the group is now established as a profit-making State company.

I should like to compliment the management of OIE and to indicate to them in public, as I have in private, that the co-operation which they obtained from the workforce and the flexibility with which new management techniques were enabled to be implemented, following proper dialogue and consensus with the workforce, has ensured that five hotels have continued to trade profitably and improve their performance considerably. Deputies who are familiar with the company will recognise that this has been achieved by a combination of trust in the Department of Labour, a policy of non-interference by the Department in the day to day operations of the company, even at the early stages when there were fears and worries about the way the workforce would have to adapt to new circumstances, and a board who have been unselfish in the time they have given to the operation of the company and to ensuring that the chief executive got all the support and advice which the broadly experienced board were able to bring to bear. I take responsibility for the appointment of that board, with the agreement of the Government. There is a model in that success story which other State companies should examine.

It would be wrong to say that because a company is a State company it must be a good thing, or to say that because a company is in private ownership it must be a good thing. That is the kind of ideological straitjacket that none of us can afford and which provides a cover for inefficiency on the part of management or an ability by some sections of the workforce to exploit their position to demand that deficits in the operation of that company should automatically be funded out of the State purse. We have had debates on this. There is a necessity to say that we will have a positive and constructive way of approaching State companies, that we will not just use them to fill gaps which the private sector will not fill.

We have to move on to a more positive approach to the whole idea of semi-State companies, which is what we have been trying to do with the National Development Corporation. I regret that it took so long to get the NDC, or NATCORP as it is now called, off the ground. I do not think there is any secret that there was a difference of opinion in the interpretation that the Labour Party had as to how best that should develop and the interpretation that some sections of the Fine Gael Party had in relation to the National Development Corporation. Part of the reason — and I address my remarks now to those in the semi-State companies generally — for some of the opposition to the idea of the National Development Corporation was the perception by some who had no particular ideological axe to grind that semi-State companies had become so inefficient, or were perceived to be so inefficient, that this would not be a profitable venture, would not be viable and would not get the sort of performance required and certainly not the job creation without continuous massive subsidies. I do not accept the view, but I can understand in one way how that perception would be abroad. This House to a certain extent must take responsibility in part for not ensuring that we took a healthy interest in the way in which our State companies were developing.

All of us are politicians and we all have to deal with State companies in one shape or form. In making the normal sort of representations that we do on behalf of our constituents, on behalf of the particular constituency which we might represent in order to maintain a presence, or to ensure certain levels of employment, if we do that at the expense of not insisting that these State companies become efficient, more efficient, profit centres in their own right, the short term success that we might have of maintaining the companies would be compounded by long term failure. There simply would not be the resources ultimately to underpin those companies should they get into long term structural difficulties. We have seen that with regard to Irish Shipping where, through a combination of factors, the position in terms of figures was presented to the Government and the taxpayers that was, in our view, regretfully totally unacceptable and hence that decision was made. Difficult as it was to make, it has had, I think, a very positive effect overall on the recognition by people in the semi-State sector that there is a need for efficiency and performance, for profit and wealth creation. The Labour Party have never had any difficulty about the creation of profit. Our difficulty has been that the people who tend to create it do not get a sufficient share of it, or that the sharing out of the profit is not equitably based. No economic enterprise can develop if profit and wealth are not created at the end of it. Some commentators would like to attempt to portray us as being anti-profit. We are not anti-profit.

Anti-excessive profit.

We are against the stealing of profit by a section of the workforce, be it management or whatever, that have not earned their fair share of it. It is economic nonsense in a country that is growing in terms of demands, in terms of population, in terms of requirements for additional services if all our enterprises, public and private, do not create wealth.

In a number of State companies — and we have had debates on these in this House — there has been a slow and steady improvement in areas where there have been external factors — be it the price of energy, the cost of competition from other external companies, the glut in terms of certain industrial commodities, while the EC does its best to all intents and purposes, virtually being dumped into the market, or dumped in the form of subsidies which are very cleverly hidden by their own governments. There has been a recognition by many people in the State sector that efficiency and performance are the absolute sine qua non in order to ensure that these companies will maintain their current workforce at best, and will, it is hoped, develop it into the future in certain subsidiary categories.

I would quote, in evidence of that view, a speech made recently by the general secretary Mr. Billy Attlee of the Federated Workers Union of Ireland, my own union who has made public speeches — and the FWUI have many workers and many members in the State sector — that the best way that the members of the FWUI in those commercial semi-State companies can protect their jobs and their economic future is to out-perform the private sector, to be more efficient, more effective and more profitable in a company sense, and to do that in terms of changing market conditions and in terms of new sources of competition — requires an adaptability to adjust to new circumstances.

There has been a false argument, not just in this country but elsewhere, that labour market flexibility — to use the jargonistic phrase that has emerged in talks in other countries — somehow or other implies either a reduction in wages, which it does not, or a reduction in basic social protection which workers in the labour movement have acquired over a certain number of years through their combined efforts. That is not what it meant and it has been wrongly attacked as such. I am glad to be able to tell the House that in the programme for jobs and employment which was adopted at the Social Affairs Council of the Social Affairs Ministers and Labour Ministers last week in Brussels, which I attended, the document which was adopted unanimously by all the member states representing governments of different political complexions clearly makes the distinction between the need for a workforce to adapt to change on the one hand and the rights of workers to retain the protections which are vital to their economic and social wellbeing. There is no conflict between the two.

However, there has been a presentation by some people — and one can understand it, it is a free society and free collective bargaining is part and parcel of the process — to suggest that any change will have to be resisted and that if there is to be change it has to be paid for, so to speak. The rate of change and the effect on semi-State companies from the outside is such that I do not think we can enjoy those kinds of days any longer. It is no longer a question of simply paying for change internally. It is a necessity that we adapt to change, or we simply will not survive.

The last point I want to make is this. I am a person who believes in effective and strong management, but I believe in effective and strong management after there has been comprehensive and substantial dialogue with the people involved. In 1986 it is absolutely Victorian and contradictory to educate people to the level that we do, to have highly trained technicians, highly trained accountants, highly trained professionals in one shape, size or form, or highly experienced people in a general sense and to treat them like children in the context of how they should do their job. It is for that reason that the concept of worker participation, industrial democracy within the workforce, is something that I very strongly support.

There is a need to consult, to involve, to ensure that if there is to be change people should have the right to know what that change will be, the right to voice their views on how that change can affect them and the right to be able to suggest alternative ways of accommodating change in an adult and sensible manner and within a framework that respects their rights as human beings, as workers and as citizens, which is what is necessary in a semi-State company. It is for that reason that the Worker Participation Bill which I have now introduced into the Seanad, whose delay I regret, has provided for the extension of the experimental programme which was introduced in 1977 to a new category of State companies and, most important the introduction of flexibility itself in how appropriate sub-board structures should operate within semi-State companies. Worker participation simply is not about electing two, three or four people to a board of a company that may have 10,000 or 20,000 employees. Worker participation is deciding how best the job can be done by the people who are actually involved in it at all levels and then getting on with doing the job once they have been consulted.

I would hope when this House, after the New Year, is in a position to discuss that Bill, that the Deputies who are so clearly concerned with the viability and profitability, with the strength of commercial semi-State ventures, will give me the kind of support——

The other way around.

——which I will need. Time runs out for all of us but it is important that these things are done. I wish to thank the Fianna Fáil Party for putting down this motion and I welcome their conversion to viable State enterprise.


This Government directly and through their spokesmen have, since coming into office, carried on a campaign of denigration against the whole public and semi-State sector. The feeling of resentment within the sector boiled over in the first and, hopefully, the only full day strike by the Civil Service. All semi-State bodies have been the victims of this campaign and Aer Lingus have suffered more than most from threats to sell off shares in the company on the day that they celebrated their 50th anniversary to attacks by the Minister on fares packages and to what could reasonably be described as sales promotion work by him for rival airlines engaged in creaming off business and profits from the major routes of Aer Lingus.

Aer Lingus in 1986 are celebrating their 50th year of serving the people. They have a staff of 6,000, 5,000 in Ireland, the balance overseas plus the subsidiaries of the Dunfey hotel staff running to nearly 6,000. At present they have a fleet of 25 aircraft and in the year up to March 1986 carried 2.25 million passengers. This company have been one of the success stories of the semi-State sector and of business generally. It is a company in which the people have a sense of justifiable pride. One would have assumed that the Minister responsible for the airline would share the national joy on the 50th anniversary of this company, but no, he took the opportunity on that day, much to the dismay of the workforce, to raise the fears in their minds as to their future by proposing the sale of shares in Aer Lingus, supposedly to raise funds for fleet replacements. He attempted to justify this major change from public ownership by using distorted figures of financial requirements of £1,000 million for fleet replacement, a figure which is totally incorrect and which he has failed to substantiate.

It is important to remember that in the 50 years' history of the company the total equity investment by all Governments has been £73.6 million — less than the cost of even one jumbo jet. This can be set against the airline's assets which are conservatively valued at £300 million.

I want to put on the record the factual situation regarding the funding needs of Aer Lingus. Far from the £1,000 million which the Minister continually speaks about, he has now admitted in a letter that the actual figure involved for the European and cross-channel fleet is £200 million. More than half of that figure will be raised by Aer Lingus from profits and by borrowing. The figure being sought by Aer Lingus from the Government is less than £100 million and £45 million of that relates specifically to past debts which arise from losses incurred on the trans-Atlantic service. This latter loss was incurred by the company because of the view of successive Governments that it was commercially essential for this country that a scheduled trans-Atlantic service would be available on a year round basis. The balance of the £55 million being sought from the Government relates to Government equity investment. In order to ensure that the company maintains an adequate debt equity ratio it is essential that the Government, as shareholders, provide equity. The capital requirements for the European and cross-channel fleet will arise as aircraft are replaced and, as this will be done on a phased basis, the Government equity investment can be made over a period of years. The company's plan is to replace the older aircraft in the European fleet on a phased basis over the years by both new and secondhand aircraft. The Aer Lingus investment proposals currently before the Government relate to the European fleet only.

Despite the Minister's acknowledgement that the figure for European fleet replacement is £200 million, he again raises the figure of £1,000 million and explains it as follows:

Aer Lingus capital requirements over the next ten years, including the financing of fleet replacement on its European, cross-channel and North Atlantic operations, as well as its ancillary activities come to a sum in the region of £1,000 million. That figure includes:

—£200 million for replacement of aircraft on the European and cross-channel routes, and

—£475 million for the company's extensive range of ancillary activities.

The balance of the £1,000 million is an estimate of the cost of fleet replacement on the North Atlantic routes.

The figure of £1,000 million quoted by the Minister in his letter was first raised by him in an article published in The Irish Times on the occasion of the airline's 50th anniversary in May of this year. It has since been quoted by him and by the press on numerous occasions. Despite repeated attempts to put the record straight, members of the public must by now be convinced that Aer Lingus are looking for £1,000 million from the Government. No such figure exists in relation to the airline's fleet requirements. No such figure is being sought by Aer Lingus from the Government in respect of any or all of the company's activities.

The Minister's reference to a figure of £475 million for ancillary activities does not relate to the proposals before the Government for equity investment for the European fleet. This figure would appear to include every possible capital requirement of the Aer Lingus group of companies projected over the next ten years — for example, an annual figure is estimated for day to day capital expenditure and then multiplied by ten. Any such capital expenditure would be raised by the group of companies and not from the Government. In fact the bulk of the capital requirements of the subsidiary companies would be raised by those companies themselves. There is no question of Aer Lingus seeking Government investment to cover these capital requirements. No Government investment is required for this type of day to day capital expenditure and no such investment is being sought from the Government.

The Minister goes on to state that the balance of the £1,000 million is an estimate of the cost of fleet replacement on the North Atlantic routes. The trans-Atlantic fleet is not involved. The Government's Green Paper on Transport acknowledged that the three B747 aircraft currently being used on the North Atlantic operations have a reasonably long life ahead of them and that their replacement is unlikely until well into the nineties. The figure of £1,000 million simply does not exist in relation to the proposals currently before the Government.

The Minister continues to use this mythical figure of £1,000 million and every time it is used, it is damaging to the airline and damaging to the morale of the staff of the airline. Aer Lingus are not looking for a subsidy or for £1,000 million as Minister Mitchell tries to portray but for an investment of less than £100 million by the Government as shareholder in a profitable company. A total net profit of £41 million was made by the company in the past three years. Surely such a company and their workforce are worthy of support and should not be the subject of continuous sniping?

We in Fianna Fáil believe in a state owned national airline and we believe that if Aer Lingus can be a profitable company for anyone it should be for the State and not in a Thatcher-like sell off for the benefit of other shareholders.

We are very concerned, as are the workforce of Aer Lingus, as to the deliberations of the interdepartmental committee who are studying the fleet issues. The terms of reference of this committee are not known but we understand that they are very wide ranging and, consequently, their recommendations, options or proposals may also be very wide ranging. I say to this Minister and the Government, "you have lost your mandate to govern, do not attempt in the dying days of this administration to try to force your views of privatisation on Aer Lingus." Fianna Fáil will not stand for it. When we return to power we will reverse any damaging decision taken by this Government.

The really sad thing is that the Minister and this Government do not seem to understand the spin-off effects of the national airline. For example they are advertising not merely themselves but the nation. They spend more on advertising than Bord Fáilte spend in the United States. The social and economic benefits of 6,000 people being employed cannot be overstated. The benefit to the country of the ancillary activities providing as they do, jobs from nursing in the Middle East to airline related jobs in Africa, cannot be overstated. What is needed is a Minister who believes in the public sector and the fact that the Irish taxpayer should benefit from the history and financial success of a national airline.

The Minister and the Government simply do not understand and support the need for a State owned national airline. Let me inform the House as to why Ireland needs its own State owned airline.

Ireland is a small island economy located on the far west of the European Community and air transportation is an integral part of the economic infrastructure. It is economically and socially essential that Ireland continues to own its national airline. Only the State's own airline can be relied upon to give total long term commitment to the provision of regular year round scheduled services between Ireland and the UK, Europe and the US. There are far-reaching benefits from regular year round connections for passengers and freight to the main cities of Ireland's trading partners in Europe and the US. The Government's Green Paper on Transport acknowledges that Aer Lingus provide the strategic links that are required on a year round basis for the development of Ireland's trading with the rest of the world. If any portion of the State owned airline is sold now it will be only a matter of time before more and more is sold off. Ireland and the Irish people will lose control if this happens to this vital element of our economic development.

The Minister for Communications, by his lack of commitment to the airline, has sapped the morale of the company to such an extent that next to the period when the first Coalition sold the trans-Atlantic fleet and delayed the development of the company by nearly 15 years, this period is the next damaging. The sooner the Minister and the Government go, the sooner this company can reach their full development potential.

The recent declared intention by the Government and by some of the Coalition Ministers that they were going to sell off the profit making semi-State bodies came as a great shock to the country at large. In effect it is nothing more nor less than a statement which is tantamount to declaring Ireland a bankrupt nation and saying they want to get involved in the formal selling off of our national assets. We know there is a Government greed for money at this time. We know they have an insatiable appetite for money to shore up the empty coffers of the Exchequer. They are not satisfied to wreck the economy, they want to sell off any of the profit making ventures and projects that we in Fianna Fáil set up with loving care over the past 60 years. They set the all time record so far as unemployment and exporting people and money are concerned. They hold the all time record for borrowing and for the national debt. Now they want to add to their list of records the fact that they are the greatest liquidators and receivers of Ireland Incorporated.

We are not satisfied that they should be given that chance. This evening we see a further example of the ideological differences that exist in the Coalition at this time — from the right wing arch-monetarists of Fine Gael to the pseudo-socialists on the left. They are bleating at each other hoping they will be able to create some confusion in the minds of the public as to which side they are on, for or against the industries and the semi-State bodies which have served this country well in the creation of jobs for the past 60 years.

The need for the semi-State commercial sector has been there for some time. It was met and developed by successive Fianna Fáil Governments and that need has not changed. We take the pragmatic view so far as maintaining the strength of the commercial semi-State bodies are concerned and we are not interested in the ideological differences that exist between the two wings of this disgraced Government. We say that if it is working let it continue and keep creating the development and the job potential that exists, but if it is not working, we must ask what is wrong with the semi-State organisations. If there is something wrong, it should be put right rather than handing it over for a pittance to individuals who will make fortunes on the backs of the taxpayers whose money was involved from the start.

The development and potential of our natural resources has been given a lot of lip service over the past number of years. We say there is a great need at this time for that development. Surely there is no area more worthy of State involvement than our natural resources. What have we seen by way of experience of this Coalition Government? They mandatorily made people on our bogs and peat lands redundant. They tried to contemplate the selling off of the State forests, despite the fact that it was taxpayers' money which was put at risk initially to develop these forests. They would now hand them over to some private concern to make profits from the money which was expended on our behalf so many years ago.

What have they done to the fishing industry? They sold it off by badly neglecting our strategy for negotiating at EC level and they never created a situation where we would get sufficient people on shore in the processing industry as against those on the high seas. That is why Fianna Fáil have laid down as part of their fundamental policy for return to Government that we will deal with these matters and create new initiatives in all areas of State endeavour.

There is no doubt but we must look at what they have done in the area in which I am very concerned, that is, the tourism industry. All the strengths of that industry are God given — our people, our climate, our scenery and our infrastructure. All the weaknesses are man made. We have to change some of those weaknesses to get back the full potential of that industry to the Irish people. This Government have consistently denied to the marketing and promoting agencies of Bord Fáilte the means and the resources necessary to enable them to carry out their functions properly.

The total spent on industry in this country is £2,000 per job; the total spent on agriculture is £2,150 per job but the total spent on tourism is just £850 per job created. Out of the £1,000 million spent on those three areas of activity, the tourism share is a mere 3 per cent. That is the commitment the Coalition had to the tourism industry during their term of office.

The tourism industry is labour intensive and has great potential for job creation. The Government bleat that at us every time they come in here but still they refuse to give the necessary finance to Bord Fáilte to enable them to generate jobs. Tourism is an integral part of the services sector and given the monetary encouragement necessary it can fulfil its job creation potential. It must be remembered that the total spent on tourism impacts on every other sector of the economy — from the local suppliers and small businesses to the big companies. These people have all felt the pinch this year with tourist numbers down. Let there be no doubt about it. It was not Chernobyl or the lack of interest from the Americans travelling to Europe that crucified tourist numbers this year, but the lack of commitment and the lack of promotional and marketing money being provided by this Government.

A mere £30 million is being voted to Bord Fáilte this year to cater for a £1 billion industry which provides 80,000 jobs and creates £386 million in taxes for the Exchequer this year. Since this Government took office Ireland's share of the international tourism industry has been falling off. They failed to maintain the competitiveness of the industry. They failed to maintain the profitability margin of the industry. They also failed to maintain the standards necessary to attract more people to avail themselves of our tourism product. We lay the blame firmly where it should be — at the door of the Coalition Government.

There is no point talking about what they might or might not do to support the semi-State sector and our natural resources. Here is a means readily available which can generate much needed employment but still they are reluctant debutantes when it comes to the Cinderella of the industries, namely, the tourism industry. What was necessary was a marketing response because every pound spent on marketing in tourism generates £15 worth of spending. Out of that £15, it is estimated that £7.50 comes back directly to the Exchequer by way of taxes.

The appeal of Bord Fáilte has to be broadened and we want to see more money being given to the marketing and promotional side of Bord Fáilte to enable them to sell Ireland to the high income non-ethnic sectors in the United States and in the United Kingdom. This has been the major failure of this Government in their dealings with the tourism product. We want cost effectiveness of the promotional expenditure of Bord Fáilte, but we are not satisfied that Bord Fáilte are being allowed to develop their full potential in attracting tourists because they have been denied the financial muscle which is absolutely necessary to generate that growth for the Irish people. That is why this Coalition Government stand condemned as the great liquidators of Ireland International and Ireland Incorporated.

I move amendment No. 1:

To delete all words after "development" and to substitute:

"and recommends that a radical programme of review and co-ordination takes place, with a strong emphasis on:

(i) clarifying the remit, role and function of semi-State agencies, where appropriate;

(ii) restating clear economic and social goals and targets where necessary;

(iii) introducing an adequate and comprehensive system of rewards of standards of excellence and achievement;

(iv) eliminating waste and duplication where they exist;

(v) introducing modern management systems and controls where necessary; and

(vi) encouraging greater public participation and joint venture programmes, as appropriate, in the development of State assets and resources."

I believe our amendment provides a much sharper focus than The Workers' Party's extremely bland amendment or the Government's equally bland counter amendment. It gives us an opportunity to assert firmly and clearly the potential of an efficient and an effective semi-State sector as a major instrument of economic development and employment potential. It is also right that we should point to the need for urgent rethinking of the direction and management of this sector if its maximum potential is to be realised.

Bland generalisations about the centrality of the semi-State sector in our way of life are no substitute for determined and clear-sighted action to bring about the changes that are necessary. Many of those changes arise from the absolute lack of any co-ordination of all the elements and agencies within the sector which continues to grow, in pursuit of clearly stated economic and social goals. That co-ordination is essential not just in terms of working towards those clear targets, but also in terms of the most efficient use of a budget which runs into many hundreds of millions of pounds.

The definition of semi-State activity is a grey one. There is no clear definition of its parameters because there are many agencies and bodies in receipt of annual public funding which could legitimately be argued to fall within the ambit of semi-State activity and which at present are in no way co-ordinated or accountable. It is fair however, to say that there are well in excess of 100,000 people within the semi-State sector, including the local authorities and health boards: that there is one person for every full time farmer employed in that sector or one semi-State employee for every two people involved in manufacturing, presiding over a very wide and diverse range of economic activity. The scale of the opportunity and the problem is vast.

All of our efforts should be to underscore that vital role, the extraordinary potential and the essential nature of much semi-State activity. Our efforts should be to encourage the highest standards of excellence in the direction of achieving clear targets. If those directions or those targets are not clear, we submit they are not sufficiently clear, the responsibility lies with successive Governments who have pretended that there is no problem — the Government amendment suggests that tonight — or that reports such as that of the National Planning Board, which produced a very constructive and highly regarded document on this area, can be ignored. Therefore, our approach must be positive towards the people in the semi-State sector, encouraging of their efforts, rewarding when those efforts pay dividends, and full credit given at every opportunity for work well done.

This can only be done by introducing an adequate and comprehensive system of rewards and incentives for standards of excellence and achievement. The regimented codes and traditional Civil Service attitudes to promotion depress initiative and in no way necessarily reward high standards. Maximum flexibility for semi-State bodies, giving them the right to incorporate the most modern reward systems within their operations, is essential if we are to make progress in this respect, and such incentives must include cash payments where appropriate.

Perhaps, more fundamentally, the environment within which the semi-State agencies operate has to be reviewed, so that the remit, role and function of each such body is clarified and their economic and social goals clearly restated. This could mean that some agencies and bodies might very well be amalgamated, still others might have to be created, and there may well be a case, arising from such a review, for some such bodies to go out of existence. This sector, as a fundamental element in our economic life, has to evolve and change to meet modern needs. It cannot be immune from the kind of demands which face other areas of economic life in this country at present. In general terms this has not occurred apart from the creation of one or two new agencies, the merits of which in some cases are dubious to put it mildly.

There is also an obvious need to eliminate waste and duplication where they exist, and they do exist but not everywhere. It is obvious that there are cases where there is overlapping and lack of clarity in terms of jurisdiction. These have given rise to unnecessary duplication and this has to be dealt with. It can only be dealt with, of course, where modern management systems and controls are introduced and the semi-State bodies do not have sufficient autonomy in this respect. Far too often, their actions and activities have to be overseen by a Government Department's bureaucracy who insist on a plethora of written reportage and clearances from Ministers before allowing the semi-State agencies and bodies to take the slightest initiative. This, in itself, is an absolute waste of money and tends to massively depress the sense of initiative within the semi-State sector.

One way of introducing a new dynamic into this sector would be to encourage greater public participation and joint venture programmes involving the semi-State sector and members of the public in the sensitive and gradual development of State assets and resources, where this might be appropriate. Such an initiative could take place on the basis that one was talking about retaining majority rights within State hands, but take place it should. It is fundamentally wrong and economically shortsighted to encourage people to save money by means of pension funds in order to provide for their own futures through their personal savings, while not allowing for such people to realistically invest those hard won earnings in the widest possible share market. By absolute exclusion of the semi-State sector from such investment opportunities, which can quite reasonably involve very small savers, individual pensioners, and others with a little to invest, we are discouraging people from saving for their own futures, encouraging yet further reliance on the State and not allowing people to become involved.

There is a great deal that is extremely good about the semi-State sector. This kind of vacuous debate which does not focus on the sharp reality of the need for change, progress and evolution does not do the semi-State sector or the public a service. We formally seek to have our amendment put before the House.

I move:

After "contrary." in the last line to add the following:

Dáil Éireann further deplores the failure of successive Governments to recognise the potential of the State sector for job creation, industrial development and economic growth, and calls for the expansion of the State sector into productive profit making areas.

I want to thank the Fianna Fáil Chief Whip for allocating five minutes to me and for giving me the opportunity to move the amendment in my name and Deputy Mac Giolla's name. We deplore the failure of successive Governments to recognise the potential of the State sector for job creation, industrial development and economic growth and call for the expansion of the State sector into productive profit-making areas. It is significant that in October last the Irish Congress of Trade Unions launched a document entitled "Public Enterprise — Everybody's Business". In launching that document the president of the Irish Congress of Trade Unions said:

Public sector workers and their unions will also work for change and to make public enterprises "centres of excellence". Workers are not afraid of change when that change is for the better. We believe in public enterprise that is efficient, dynamic and growing — public enterprise that creates new jobs and makes existing jobs secure — public enterprise that will benefit its workers, its consumers and its owners, the people.

That is a very clear statement of where the unions of this country stand in relation to the public sector. It is strongly in favour of its development and not its reduction and its scuttling as happened recently under the Government in relation to Irish Shipping. That had atrocious effects on the living standards of thousands of men and women who are dependent on jobs in Irish Shipping.

There have been a number of examples in recent times of the tendency of the Government to decide that the way to get out of the financial problems is to sell off parts of the State sector. The most recent one I can recall is the proposal that the State forests should be sold off. There are always attempts to sell off bits and pieces of one company or another. There are proposals afoot at the moment to marry NET with Imperial Chemical Industries Limited. One wonders if that will have the same effect on NET as the marriage between Heinz International and Erin Foods Limited which destroyed the Erin Foods company. The Minister for Labour who declared tonight that his Government are totally in favour of the public sector and of the development of the public sector was trying to con this House and the people outside the House. We only have to recall the manner in which the Government treated the ESB, a company who get no State funding whatsoever, who never got any State funding or equity capital and who have to borrow in order to operate. At the same time, they are used by the Government to collect taxes. The Government impose levies on them, they decide what will be their fuel costs and a couple of years ago doubled the costs of natural gas to the ESB. While the Government decided to allow the ESB to sell coal which they import, a Labour Deputy in the House today decried the fact that the ESB will be allowed compete openly with private enterprise in the sale of coal.

The whole question of private enterprise is dogged by a fairly general commitment in this House to private enterprise. It has been said by a number of speakers on both sides of the House that they have no ideological hang-ups but when it comes to a choice between private and public enterprise it is my experience that private enterprise always wins out. It should be remembered that the IDA, Fóir Teoranta, the various employment subsidies, subsidies to farmers, to the ICI, the ACC and so on all operate in the interests of private enterprise and that it takes in the region of £1.5 billion per year to support private enterprise. It is private enterprise that has failed in this State, not public enterprise.

The first question I should like to answer is one raised by two Government Ministers as to where Fianna Fáil stand in regard to State and semi-State enterprises. I should like to remind the House, if it is necessary to do so, that the concept of semi-State enterprise was the brainchild of the late Seán Lemass and we continue to walk in his footsteps in promoting and developing semi-State and State enterprises. That is not to say, as the Minister for Finance tried to suggest last night, that any time we are in Government we just throw money at various companies to try to solve their problems. That has not been our record in Government and the Minister, Deputy Bruton, more than anybody else, should know that. Indeed, some of the suggestions he made last night amazed me.

I listened to the Minister time and again espouse right-wing capitalism. I am a capitalist myself but I would not reckon I am anything like as right-wing as the Minister and last night he made a speech on converted socialism the like of which I have not heard made by any Member on this side of the House. For ten minutes last night he lauded and lauded the National Development Corporation. That was unusual for a Minister who has spent the past four years in Government trying to stultify it, prune it down and make sure it would never see the light of day but last night he praised it to the sky. There is no depth to which any Minister is prepared to stoop to hang on to power. I am glad to be able to tell the Government that the dying days are numbered. In fact, as an observer of the scene around the House, I can say that rigor mortis has set in and the funeral will take place about the third week in January.

Last night the Minister for Finance lauded the National Development Corporation as the great engine of growth but I wonder if the House will believe the Minister has not appointed a chief executive to the corporation? Will he explain that to the people? In the course of his speech the Minister told us about the Government throwing money at various semi-State bodies and said he was proud of the great performance of those bodies. I should like to remind him that in 1982, after his ill-fated budget had led to the collapse of the Coalition Government, I took over as Minister for Industry and Energy. I found in the Estimates prepared by the Minister, Deputy Bruton, £35 million of equity capital for NET. NET never got one shilling of that £35 million in 1982 but the board and chief executive of NET were called in by me to be told that there was no more money available and that a better management job would have to be done. I asked them to set out their corporate strategy for the next few years and get their house in order. That was a decision by the supposedly spendthrift Fianna Fáil Government. I must commend NET, the board of directors and the chief executive who has since gone to sort out the problems of CIE, on the magificent turnaround in the fortunes of that concern. Had I followed the example of Deputy Bruton and thrown £35 million at that concern I have no doubt that they would be losing money yet. At that time they were losing £35 million annually but they have made a profit in two successive years since. However, because of the exchange rate policies they had a loss last year. The Minister tried to claim credit for the success of NET.

The Minister told us that Aer Lingus had a profit of £19 million. I should like to compliment the company on achieving that profit but it is a sad indictment of the Government who have been running the country for four years that a large contribution of that £19 million has come from the thousands of emigrants who have had to take flights to America. Heretofore the aircraft were empty going to the US and full on the return journey but that has changed. I was proud of the members I appointed to the board of Aer Lingus. At the time I appointed them the company were losing £17 million and if the philosophy of the last Coalition had been adhered to the hotel chains would have been sold off along with the other successful subsidiaries of the company. The attitude of the last Coalition was to sell off subsidiaries and get rid of the problems. The new board, under a chairman who had experience as a general manager of the company, turned around the fortunes of the company. I am glad to say that the company are strong in profit and I hope that in the next 50 years they will have continued success.

We cannot forget that it was a Coalition Government who sold off the Constellations and that it was the late Deputy James Dillon who said that the rabbits would be running around Rineanna using it as a playground. It was the view of the Government that Knock Airport would not succeed but I am glad to be able to salute the take-off by Ryanair from Knock Airport yesterday on its first scheduled flight. We do not have any ideological hang-ups about semi-State and private enterprise. We do not amble down a particular road but we have a simple and commonsense view of how to use our money and the companies we should support. Bord na Móna, languishing after two years of bad weather, are hanging on and will be out of money by April or May. What are the Government doing to help them? The Government have offered them a soft loan but that is no good to Bord na Móna. They need a conversion of the existing loans to allow them get rid of the expensive loans the Government forced upon them from the European Investment Bank at rates of between 17 per cent and 18 per cent. That is an indication of Coalition management of the semi-State sector.

If the Government were serious about Bord na Móna they would convert the Government loans into equity and permit the company to get on with the business of running the company. We do not subscribe to the selling off of our forests to Johnny-come-lately speculators who will make a fortune out of them after progressive Fianna Fáil Governments down the years established that national asset. I should like to make it clear that between now and our return to Government we will be discussing with the various interests the future of our forests. In our view Bord na Móna are the best semi-State body to take over forestry. The development of our bogs and our forests should be carried out by the one company. That is the type of development corporation we will make out of Bord na Móna when we are returned to power in the not too distant future.

The Minister has told us that Aer Rianta turned around a profit of £5 million. I recall appointing the board of Aer Rianta to take over a business that was experiencing severe losses. The company have turned in profits of up to £12 million but that is no credit to the Government. Yet, they have the audacity to say that they are going to look at the system of appointing new boards of directors to the semi-State system having gone round each body since they took office and stuffed their own political hacks into them. In the last four years they filled every vacancy in sight with their own political hacks. How can they say that now they are going to set up a panel of competent people to choose the members of those boards? It amazes me the price every Minister is prepared to pay to hang on to power.

Is it any wonder that the citizens of Dublin in a recent opinion poll displayed a rate of dissatisfaction of 9:1 with the Government. If they do not go quickly it will be 10:1 because they do not have anything left to give. The Government are living on borrowed time and using borrowed money. I am contributing in the last Private Members' debate of this Dáil and I expect a general election in February. I am confident that Fianna Fáil will sweep the Government out of office and that the parties opposite will not be heard of until the end of the century. They promised everything but did not deliver anything. Their cure was worse than the disease. They said they would bring down borrowing but they sent it through the roof. They said they would halt the trend of unemployment but they did not do that. However, they looked after their own.

Write the death certificate.

Rigor mortis has now set in and I will prepare the death certificate because I expect the end to come in the second or third week of January. We will meet at the polling stations and we will be glad to change places with the Government when the new Dáil assembles because I reckon that this is the second last day of this Dáil.

I am putting amendment No. 1 in the names of Deputy Keating and others.


Will those who are demanding a division please rise?

Deputies O'Malley, Harney, Molloy, Keating and Wyse rose.

Amendment put and declared lost.

In accordance with Standing Orders the names of the Deputies dissenting will be recorded in the Journal of the Proceedings of the Dáil.

I move amendment No. 1a:

To delete all words after "employment" and to substitute:

"supports Government policy towards the semi-State sector, and notes the steps that it has taken to improve the performance of the sector — including Exchequer investment on a major scale."

Amendment put.
The Dáil divided: Tá, 81; Níl, 74.

  • Allen, Bernard.
  • Barnes, Monica.
  • Barrett, Seán.
  • Barry, Myra.
  • Barry, Peter.
  • Begley, Michael
  • Bell, Michael.
  • Bermingham, Joe.
  • Birmingham, George Martin.
  • Boland, John.
  • Bruton, John.
  • Bruton, Richard.
  • Burke, Liam.
  • Carey, Donal.
  • Cluskey, Frank.
  • Collins, Edward.
  • Conlon, John F.
  • Connaughton, Paul.
  • Coogan, Fintan.
  • Cooney, Patrick Mark.
  • Cosgrave, Liam T.
  • Cosgrave, Michael Joe.
  • Coveney, Hugh.
  • Creed, Donal.
  • Crotty, Kieran.
  • Crowley, Frank.
  • D'Arcy, Michael.
  • Deasy, Martin Austin.
  • Desmond, Barry.
  • Desmond, Eileen.
  • Donnellan, John.
  • Dowling, Dick.
  • Doyle, Avril.
  • Doyle, Joe.
  • Dukes, Alan.
  • Durkan, Bernard J.
  • Enright, Thomas W.
  • Farrelly, John V.
  • Fennell, Nuala.
  • FitzGerald, Garret.
  • Flaherty, Mary.
  • Glenn, Alice.
  • Griffin, Brendan.
  • Harte, Patrick D.
  • Hegarty, Paddy.
  • Hussey, Gemma.
  • Kelly, John.
  • Kenny, Enda.
  • L'Estrange, Gerry.
  • McCartin, Joe.
  • McGahon, Brendan.
  • McGinley, Dinny.
  • McLoughlin, Frank.
  • Manning, Maurice.
  • Mitchell, Gay.
  • Mitchell, Jim.
  • Molony, David.
  • Moynihan, Michael.
  • Naughten, Liam.
  • Nealon, Ted.
  • Noonan, Michael. (Limerick East)
  • O'Brien, Fergus.
  • O'Brien, Willie.
  • O'Donnell, Tom.
  • O'Keeffe, Jim.
  • O'Leary, Michael.
  • O'Sullivan, Toddy.
  • O'Toole, Paddy.
  • Owen, Nora.
  • Pattison, Séamus.
  • Prendergast, Frank.
  • Quinn, Ruairí.
  • Ryan, John.
  • Shatter, Alan.
  • Sheehan, Patrick Joseph.
  • Skelly, Liam.
  • Spring, Dick.
  • Taylor, Mervyn.
  • Taylor-Quinn, Madeline.
  • Timmins, Godfrey.
  • Yates, Ivan.


  • Ahern, Bertie.
  • Ahern, Michael.
  • Andrews, Niall.
  • Aylward, Liam.
  • Barrett, Michael.
  • Barrett, Sylvester.
  • Blaney, Neil Terence.
  • Brady, Gerard.
  • Brady, Vincent.
  • Brennan, Mattie.
  • Brennan, Paudge.
  • Brennan, Séamus.
  • Briscoe, Ben.
  • Browne, John.
  • Burke, Raphael P.
  • Byrne, Hugh.
  • Byrne, Seán.
  • Calleary, Seán.
  • Collins, Gerard.
  • Conaghan, Hugh.
  • Connolly, Ger.
  • Cowen, Brian.
  • Daly, Brendan.
  • De Rossa, Proinsias.
  • Doherty, Seán.
  • Fahey, Francis.
  • Fahey, Jackie.
  • Faulkner, Pádraig.
  • Fitzgerald, Gene.
  • Fitzgerald, Liam Joseph.
  • Fitzsimons, Jim.
  • Flynn, Pádraig.
  • Foley, Denis.
  • Gallagher, Denis.
  • Gallagher, Pat Cope.
  • Geoghegan-Quinn, Máire.
  • Gregory-Independent, Tony.
  • Harney, Mary.
  • Hilliard, Colm.
  • Hyland, Liam.
  • Kirk, Séamus.
  • Kitt, Michael.
  • Lemass, Eileen.
  • Lenihan, Brian.
  • Leonard, Jimmy.
  • Leonard, Tom.
  • Leyden, Terry.
  • Lyons, Denis.
  • McCarthy, Seán.
  • McCreevy, Charlie.
  • McEllistrim, Tom.
  • Mac Giolla, Tomás.
  • MacSharry, Ray.
  • Morley, P.J.
  • Moynihan, Donal.
  • Nolan, M.J.
  • Noonan, Michael J. (Limerick West).
  • O'Connell, John.
  • O'Dea, William.
  • O'Hanlon, Rory.
  • O'Kennedy, Michael.
  • O'Leary, John.
  • Ormonde, Donal.
  • O'Rourke, Mary.
  • Power, Paddy.
  • Reynolds, Albert.
  • Treacy, Noel.
  • Treacy, Seán.
  • Tunney, Jim.
  • Wallace, Dan.
  • Walsh, Joe.
  • Walsh, Seán.
  • Wilson, John P.
  • Woods, Michael.
Tellers: Tá: Deputies F. O'Brien and Taylor; Níl: Deputies V. Brady and Browne.
Amendment declared carried.
Motion, as amended, put and agreed to.