Vol. 409 No. 1
13 Proinsias De Rossa asked the Minister for Industry and Commerce the steps which are being taken to implement the commitment given in the Programme for Economic and Social Progress that all grant support for industry would be related to performance with jobs as the normal trigger for payment of capital grants; and if he will make a statement on the matter.
The evaluation of projects by the IDA and SFADCo directly relates the level of State support being offered to the number and type of jobs to be created as well as reflecting the nature and location of the project.
Under revised procedures implemented in recent years, grant agreements between a company and the agency provide that grant assistance may only be drawn down when a company has achieved set targets. These will almost always relate to actual job creation, but for larger indigenous firms the targets may sometimes relate either to output or Irish economy expenditures.
Over the next three years it is intended that half of all financial assistance to medium/large indigenous industry will be by way of repayable supports, including ordinary equity and preference shares.
To further target the payment of grant assistance directly to jobs created I propose, subject to agreement by the Government and the Oireachtas and to approval by the EC Commission, to extend the eligibility for employment grants from small industry and international services—to which they are only available at present—to all manufacturing industry.
Does the Minister accept that increase in output does not necessarily mean jobs in the context of advances in technology? If it is the case, as he has just said, that we are still getting poor value for money spent in industry and if, having regard to the Minister's view of changes that were instituted recently, is there any change in the paragraph in the Programme for Economic and Social Progress which says that all grant supports for industry will be related to performance, with jobs as the normal trigger for payment of capital grants? Does that signify any change or is the Minister saying that is what we have?
What I have said, and what I would repeat, is that the procedures and criteria laid down for the payment of grants will almost always relate to actual job creation but for some larger indigenous firms the target may sometimes relate either to output or to Irish economy expenditure. The reason it is necessary to have that, and that only applies to a very small number of firms, is that firms of that type sometimes are in danger of going under altogether if they do not get some support to maintain their level of employment. They are the exception to the rule. The normal criterion applied is that of job creation.
In the case of a merger of two companies where job losses are incurred but where capital is required to get machinery to help in an export drive, would they qualify?
It depends on the circumstances. In general they would not if there is a reduction in employment, except in very unusual circumstances.
The Minister may be facing some unusal circumstances in the next 12 months in that regard.
Possibly, but each one of those cases will have to be dealt with on its own merits.
Is the Minister aware that a certain industry that the IDA regard as over-capacity in a particular area will not get grants? If the Minister extends this employment grant to all industry, does this mean that this requirement for an industry to be in an area of under-capacity will mean that if, for example, a joinery company were setting up employment created in that industry would attract these grants?
If the company are on a sensitive list they will not get grants anyway whether capital, employment or otherwise.
I thought the Minister said all industry. We should be clear on that point.
I am referring to qualifying industry. It is always assumed that non-qualifying industry is not included in the reply.
We would all agree that grant support to industry should be related to jobs and job performance but there are many industries, alluded to by Deputy Barry, particularly the textile industry, that are facing serious difficulties which may need support in relation to modernisation, perhaps in terms of the machinery they are using. Will such industries qualify for further grant aid, because without qualifying it looks as if they will not continue providing jobs here?
I have dealt with that already. I have said that there are certain circumstances in which they may, but they are limited circumstances and each case will have to be looked at on its merits.
If we are to build these big firms the IDA are talking about they will have to be assisted.
