I understand the Minister to say there were amendments but I do not think they have been circulated.
National Stud (Amendment) Bill, 1993: Committee Stage and Final Stages.
This is an entirely new Bill which has been circulated.
Are there amendments to it?
Mr. Walsh
No.
Section 1 agreed to.
SECTION 2.
Question proposed: "That section 2 stand part of the Bill."
I wish to raise some points with the Minister concerning share capital. I would like the Minister to clarify one point for me. He referred to the fact that the 1990 and 1991 accounts are now available. It strikes me that the losses could have been worse but for the fact that they keep bringing forward onto the balance sheet losses transferred to bloodstock replacement fund. Following the sale of Ahonoora the bloodstock replacement fund was very high.
At the close of business at the end of 1989 the bloodstock replacement fund stood at £5.5 million. I should like to know the present level of the bloodstock fund. This is a vital question because if the bloodstock replacement fund has not been adequately replenished and a bookkeeping exercise has been done to keep the losses to a minimum the losses may, in fact, be much greater than £500,000 a year.
Reference has been to the depreciation in horse prices. Has the value of the six or seven stallions in the stud been devalued. The market values of even the most prolific stallions with the best progeny have been reassessed. As has been said, it is bad enough not to have accounts, but it is worse if there is an attempt to conceal the true effects of the recession. Those points need to be clarified. My two questions to the Minister are first, what is the present level of the bloodstock replacement fund and, second, have the stallions been devalued to meet current market situations?
At 31 December 1991 the bloodstock replacement fund stood at £2,587,604 and the value of the stallions has been depreciated by £2.8 million.
My worst fears have now been realised. If the bloodstock replacement fund fell from £5.5 million to £2.5 million between 1989 and 1991, that indicates a reduction of £3 million. Therefore, the losses must be greater than £500,000 a year; they must be almost £1 million a year.
If the reserves go down, that would appear to be the case; it follows logically.
It is a matter of deep concern.
The information is useful and indicates the necessity for the publication of the accounts. In addition to what would seem to be a trading loss of £500,000, the stud is also dissipating its assets each year. This section proposes that the share capital should be increased to £10 million, divided into shares of £1 each. It is probably assumed that those shares will be taken up by the Minister for Finance. Is there anything in the Principal Acts which would prevent the shares being offered to or taken up by other parties? It could be very helpful to the National Stud if other parties were to be encouraged to take up shares in it. This would relieve the Exchequer, at a time of particular stringency, from the necessity to take up all these shares. The amounts involved are not huge and it could do a great deal to integrate the National Stud with the other outstanding privately-owned studs in this country if some of the owners of those studs were offered the possibility of taking up shares in the National Stud. It would be helpful if something on the lines of a joint venture, as mentioned by Deputy Yates, could be undertaken.
The Minister referred to the skeleton of Arkle. In order to make the National Stud more attractive I suggest that he might arrange to place the skeleton of Shergar beside the skeleton of Arkle.
Sam Cosgrave was looking for that.
Section 17 of the National Stud Act, 1945, provides that the shares have to be purchased exclusively by the Minister for Finance. It would require separate legislation to make them available to other parties. I will consider Deputy O'Malley's suggestion and look at the feasibility of doing this. However, as I said, it would require separate legislation.
I support what Deputy O'Malley has said in so far as it strikes me that we are now dealing with a company analogous to a company with a rights issue. The stud needs more capital, it already has a certain asset base and, as the Minister so rightly said, Ms. Pat Kelly and others should let mares like the Flame of Tara be serviced by National Stud stallions. The better the quality of the mare, the better the quality of the progeny that will be produced by those stallions.
If a person can buy 50,000 shares in the National Stud without in any way impinging on the dominant State position it will make it far more attractive for top breeders to send their mares to the National Stud. The Minister should consider any suggestion. The public service aspects — the gardens, the museums and the retention of the stud — are all a matter of public policy, but from a strategic breeding point of view my suggestion would be highly beneficial.
Question put and agreed to.
SECTION 3.
Question proposed: "That section 3 stand part of the Bill."
Why was the figure of £5 million decided on? The Oireachtas Joint Committee on Commercial State-sponsored Bodies recommends in its report that no borrowing limit be put in place and that the present ceiling of £500,000 be removed. Why did the Minister decide not to set an upper ceiling? I assume that in practice he will have to get the consent of the Minister for Finance for any borrowing. Will it be the case that additional legislation might be required in years to come which might just add to the bureaucracy? It should be remembered that Lord Killanin recommended this legislation seven years ago. It might be more prudent to have no limit. Why was the limit set at £5 million?
The approval of the Minister for Finance has to be obtained in this case. The reason we decided on a figure of £5 million was that in its five year plan the National Stud argued very cogently that the figure of £5 million would be appropriate. I accepted that figure and if it needs to be changed at a future date — hopefully, it will not have to be changed for some considerable time — then legislation will be required at that point.
Question put and agreed to.
Sections 4 and 5 agreed to.
Title agreed to.
Bill reported without amendment.
Question proposed: "That the Bill do now pass."
I should like to thank the Members who contributed to the debate and to express my appreciation for their co-operation. I will act with all due haste to have the 1990 and 1991 reports made available to Deputies and placed in the Library. As Deputies will note a member of the staff of the Department of Agriculture, Food and Forestry has been made a director of the stud — I want to know what is going on there. I assure Deputies that the contributions made here today, which were extremely helpful, constructive and knowledgeable, will be taken into consideration by the board of the National Stud.
I thank the Minister for his comments. Even though this Bill is quite small and has been gone through very quickly, there is a great deal of support in this House for the work of the National Stud, its management board and staff. We wish them well in the future. I hope that the development plan will be published. I would emphasise again to the Minister that up to 1989 the only syndicated stallion was Dancing Dissident, a particularly speedy flat horse. Syndication, which is the upper end of the market, is the way to go. That requires a direction and a push from the Minister, irespective of legislation. I hope that this will be visible immediately.
In relation to section 2 and the question of share capital — I did not want to hold up the Bill by putting down amendments — I would ask the Minister to consider what I said about the possibility of others taking up shares. It would strengthen the position of the National Stud greatly if some Irish stud owners were to buy shares in the National Stud. This would not affect the control of the stud — there would be no question of a majority holding. Rather it would strengthen the position of the National Stud and also help the Exchequer. Whatever about the trading results over the last five or six years, which have been rather disastrous, the National Stud as a company has very substantial assets. That point should not be overlooked.
Question put and agreed to.
The Dáil adjourned at 2.5 p.m. until 2.30 p.m. on Tuesday, 16 February 1993.