Written Answers. - Culliton Report Findings.
Pat Rabbitte
Ceist:
114
Mr. Rabbitte
asked the
Minister for Industry and Commerce
his views on the criticism made in the Culliton report of the poor execution of industrial policy (p.63); whether the Telesis report's recommendations were largely ignored by his Department; and if he will make a statement on the matter.
The Culliton report says at the page (63) to which the Deputy refers "that the execution of policy in regard to industrial promotion still remains diffuse". The report goes on to say that: "partly this is due to the fact that the State sector has tried to pull so many levers to promote industrial expansion that the net effect of the different instruments is difficult to discern. Policy measures have been adopted without adequate regards to consistency and without a clear and unified policy agenda".
I agree that the execution of industrial policy in relation to industrial promotion has been, and still remains, somewhat diffuse. Similar conclusions were arrived at in the Review of Industrial Performance prepared by my Department and published a little over a year ago. At the time of publication I announced certain decisions on these matters including: that the IDA would function as the sole overseas industrial promotion agency for Ireland in order to avoid overlaps and confusion in the minds of potential industrial investors; that the activities of NADCORP and the IDA would be more closely integrated to provide a more cohesive and integrated approach to State equity investment in enterprise and that CTT and the Irish Goods Council (IGC) would be merged to form a new Irish marketing agency as part of a more coherent approach to the provision of marketing support services by State agencies.
These changes have all been put into effect. I am now examining how the further recommendations in the Culliton report can be made to work in practice.
I can assure the Deputy that the recommendations of the Telesis report published were not largely ignored by my Department — nor does the Culliton report say this. A comprehensive White Paper — a decision document on industrial policy — was prepared by the Department and published by the Government in 1984. It put into effect many of the recommendations of Telesis. This is fully recognised in the Culliton report which says clearly:
Responding to Telesis, the policy changes of the mid-1980s introduced the first significant changes in emphasis. Some new schemes of assistance were introduced, there were modification in others, and there were changes in the structure of agencies engaged in industrial promotion.
Probably the most notable change was the shift away from fixed-asset grants, which were partly substituted by greater availability of employment grants and by financial aid through the form of equity or preference share finance, loan guarantees and the like...
Other initiatives included the introduction of a National Linkage Programme (1985), a refocusing of IIRS (later merged with the NBST to become EOLAS) towards industry with the introduction of the Technology Acquisition Grant scheme in 1986, reorientation of CTT's marketing supports, with an emphasis on strengthening the export marketing function in firms rather than on shorter-term logistics, and the regionalisation of the Small-Industries Programme of the IDA. Finally, a major inter-agency initiative, the Company Development Programme was introduced with the objective of assisting the strategic planning and development of selected companies (mainly indigenous) which were thought to have longer-term potential.
This refocused industrial policy was accompanied by a sharp decline in the volume of direct Government spending although the cost of tax incentives increased also. There are alternative ways of measuring this Government spending but they all show the same pattern. Between 1985 and 1989 the total industry budget (direct expenditure) fell from about £390 million of £317 million (even without correction for inflation). Despite this decline, industrial performance improved sharply in the later 1980s by comparison with the first half of the decade.
The Culliton report is an important and far-reaching document. It provides an agenda for some fundamental changes about how we think and act about the development process in this country. It is important, therefore, that when we consider it the discussion should be about what is actually in the report itself rather than any, perhaps, subjective interpretations of it.
