Vol. 440 No. 7
6 Mr. Deenihan asked the Minister for Tourism and Trade in view of the difficulties being created for businesses in tourism by the delay in finalising the tourism operational programme, if he intends to introduce interim funding measures to ensure that eligible projects can commence as soon as possible; and if he will make a statement on the matter.
Finalisation of the Tourism Operational Programme, 1994-1999, must await the conclusion of negotiations between the Government and the European Commission on the Community Support Framework. I can, however, assure the Deputy that the negotiations between my Department and the Commission on the draft programme are proceeding well, and I am confident that it will be possible to publish the tourism operational programme shortly after the Community Support Framework is finalised.
I am aware that pending finalisation of the tourism programme, there is a desire on the part of the tourism industry that some interim funding arrangements should be put in place. The marketing area has been identified for particular attention in this context. My Department, in addressing this issue, sought to secure a specific commitment in this context for EU funding. The formal agreement of the Commission on aspects of individual operational programmes in advance of agreement on the National Development Plan gives rise to practical difficulties. However, the Government's decision to provide £8 million to my Department for marketing purposes in 1994 allows necessary expenditure to be undertaken at this important time of the year. I am also making arrangements to ensure that following the agreement of the programme, eligible expenditure in respect of projects which are subsequently approved can be backdated to 1 January 1994. These measures will alleviate the concerns of the vast bulk of businesses in the industry, and while I will obviously keep the situation under review, I do not believe that any further measures are necessary at this time.
Will the Minister clarify the sentence on projects that will go ahead? Is he saying that promoters who go ahead with projects will, when the money from the operational programme becomes available, be paid from January 1994?
When the operational programme comes on stream, payment to people who have undertaken programmes will be backdated to 1 January 1994.
The Minister will, no doubt, be the source of informed leaks to some people. Will there be a reduction in the overall level of funding announced in the National Development Plan for the operational programmes as a result of the reducation in funding from Europe? When does the Minister intend to announce details of the operational programme? Will he give an indication to the industry as to what specifically will be included in it?
I do not anticipate final agreement on the operational programme until June at the earliest and the national plan has yet to be agreed by Brussels. We have been conducting negotiations for a number of months and it will be some time before the operational programme is put into effect. As the Deputy will be aware from questions put by him and his colleagues to the Taoiseach and the Minister for Finance, there has been a reduction in funding of operational programmes for all Departments, including the Department of Tourism and Trade.
Will the Minister indicate the reduction for his Department? Is he aware that hundreds of millions of pounds worth of projects, with the potential for creating employment and which will greatly add to the tourism industry, are being held back due to the delay in announcing the operational programme and the finalisation of the national plan?
I specifically referred to the marketing area and some of the budgetary measures I have taken will overcome the problem in that area. I do not see the need to take further measures. However, I accept that if the operational programme is not finalised for some time many projects in the pipeline will be held up, which would be very unsatisfactory. We have spoken to the Commission in this regard and, even thought the programme will not be announced for some time, I can confirm that eligible projects will be paid from I January 1994. At present I am not very concerned about the matter, but if the national plan was not finalised until the end of the year, some measures would have to be taken to overcome that problem.
7 Mr. J. Bruton asked the Minister for Tourism and Trade if golf-related activities including course development, provision of club facilities and driving range provision will qualify for loans under the £100 million enterprise fund announced in the 1994 Budget.
11 Mrs. T. Ahearn asked the Minister for Tourism and Trade if the ceiling of £25 million in the ICC fund for enterprise development can be raised with a view to encouraging job creation in the tourist industry in view of the fact that it will be inadequate to meet demand from the industry.
17 Mr. McGinley asked the Minister for Tourism and Trade if golf-related activities including course development, provision of club house facilities and driving range provision will qualify for loans under the £100 million enterprise fund announced in the 1994 Budget.
22 Mrs. Owen asked the Minister for Tourism and Trade if the ceiling of £25 million in the ICC fund for enterprise development can be raised with a view to encouraging job creation in the tourist industry in view of the fact that it will be inadequate to meet demand from the industry.
41 Mr. McGrath asked the Minister for Tourism and Trade if golf-related activities including course development, provision of club house facilities and driving range provision will qualify for loans under the £100 million enterprise fund announced in the 1994 Budget.
42 Mr. J. Bruton asked the Minister for Tourism and Trade if the ceiling of £25 million in the ICC fund for enterprise development can be raised with a view to encouraging job creation in the tourist industry in view of the fact that it will be inadequate to meet demand from the industry.
68 Mr. J. O'Keeffe asked the Minister for Tourism and Trade if he will ensure access to the £100 million long term fixed loan fund for hoteliers who wish to expand their premises as opposed to persons or companies building new hotels; and if he will make a statement on the matter.
232 Mrs. T. Ahearn asked the Minister for Tourism and Trade the criteria laid down for ICC loans for tourism purposes; and if he will make a statement on the matter.
It is proposed to take Questions Nos. 7, 11, 17, 22, 41, 42, 68 and 232 together.
Following the establishment of the small business expansion loan scheme, to provide accessible capital for businesses employing fewer than 50 people, £25 million was allocated for tourism projects. This ceiling is subject to review.
To date, the ICC Bank has received 224 inquiries or applications for tourism projects to the value of £54.1 million. Many of these, however, will not proceed to the approval stage. Fifteen projects have been granted approval for a total of £3 million and £1 million in respect of five projects has been disbursed. Clearly, therefore, it is much too early to say if the £25 million for tourism projects will be sufficient. The matter will be reviewed when a clearer picture emerges.
Bord Fáilte registered accommodation and Bord Fáilte and Shannon Development approved tourism products and servives are eligible for loans under this scheme. This includes significant extensions and improvements to existing qualifying facilities. It also includes certain categories of golf courses, on a restricted basis, and, subject to a case by case examination in consultation with Bord Fáilte or SFADCo, but for loans in respect of working capital requirements only.
We have been told for years — the Minister repeated this in his reply — that our tourism has the most potential for job creation. Yet we do not seem to have maximised that potential. Will the Minister agree that to place a ceiling of £25 million on the funding for tourism projects in these circumstances is a total contradiction of his earlier statement that our tourism industry has the greatest potential for job creation, which must be our first priority?
The figure of £25 million is an indicative ceiling worked out by me and the Minister for Enterprise and Employment, Deputy Quinn. When the scheme of £100 million was announced by him an indicative sum of £25 million was set aside for tourism related projects. This sum can be adjusted upwards or downwards depending on the demand for this funding and for the remaining £75 million. It is too early to say whether we will reach that figure or exceed it; this depends on the demand. The funding is adequate at present.
Will the Minister explain his statement that funding will be provided for golf courses on a restricted basis? Will he give a definition of a restricted golf course? Will he also give a commitment — he more or less implied this in his reply to Deputy Ahearn — that if there is a great demand for funding for tourism projects which obviously there will be, that these projects will receive preferential treatment under the scheme?
We will have to wait and see the level of demand from tourism related projects and from manufacturing and other areas and consider the adjustments, if any, which need to be made at that stage. On the provision of funding for golf courses on a restricted basis, when we were discussing the criteria governing the various activities which could be regarded as tourism related projects there was a reference to golf courses. It was decided that their funding would be decided strictly on a case by case basis, it would be for "pay as you play" facilities and it would be working capital only, with a maximum ceiling of £250,000. Those are the criteria under which the ICC Bank is working. Only one allocation has been made in this area to date.
For golf?
Yes.
Will the Minister agree that the indicative ceiling of £25 million does not take into account the tourism projects approved under the business expansion schemes now closing? Has his Department calculated the cost to the State of those schemes in terms of tax foregone etc?
My Department has not calculated the amount of tax foregone under the schemes but I am sure the Department of Finance has. If the Deputy puts down a question to the Minister for Finance I am sure this information will be given. Alternatively I might be able to get it for him.
In setting out the criteria for the ICC Bank we tried to be as flexible as possible and did not rule out projects which might qualify under the BES. The ICC Bank runs the scheme and there is enough flexibility in it to accommodate as many projects as possible.
Does this mean that BES projects could qualify for some of the money under this scheme?
Yes. I cannot give the Deputy details of the projects already approved — only a small number has been approved to date. There is nothing in principle to stop these projects qualifying for funding under this scheme.
Will the Minister comment on the concern expressed in a newspaper article today about the emergence of too many golf courses? The two new excellent golf courses in South Tipperary have benefited from funding. Is the increase in the number of golf courses the reason a decision on funding will be made on a case by case basis? Will the Minister say if tourists are being offered enough variety in terms of holiday pursuits? Has his Department carried out any research on the type of facilities required by tourists, rather than simply expecting them to avail of the facilities we provide? If such market research has not been carried out, why not?
When I was speaking at the conference yesterday morning I said that local operators should consider the facilities available for tourists in their towns or villages on a wet day in March. The new operational programme is aimed at the provision of all-weather facilities to attract discerning tourists all year and to provide variety. I am not in a position to announce the details of the new operational programme in so far as it relates to golf courses, but suffice it to say that there is an ongoing debate about the number of golf courses — some people say we have too many while others say we do not have enough. I suppose this depends on whether one is addicted to the game. I am not saying that my views on this issue are more coloured than those of Deputy Ahearn who probably does not play golf——
How does the Minister know?
Maybe she does, but I know Deputy O'Malley plays golf and his views are probably biased because of this.
Is the Minister assuming that women do not play golf?
I did not read the statement in this morning's newspaper, but there has been an ongoing debate over the past year or so about whether we have enough golf courses or should grant aid new courses. The new operational programme will take account of this matter. There are not enough golf courses in some areas while there are too many in others. Usually market demand will decide the number of golf courses in an area, some courses built in the past few years will not survive financially while others will thrive.
The Minister said that a ceiling of £250,000 would be placed on the loan for working capital for golf courses and that this funding will only be provided for "pay as you play" courses. Will the Minister say if that is the only assistance which will be given to golf courses from now on? If so, approximately 95 per cent of projects will be ruled out. Will any capital assistance be given to courses independently of this £25 million? Will the Minister bear in mind that while we have a great many golf courses, golfers and golfing tourists, one very good course is perhaps worth ten not so good courses from a tourism point of view? We have some recent good examples of this. Will he bear in mind the great desirability of completing the course at Adare in County Limerick on which many millions of pounds has been spent but which, unfortunately, has not been completed? If this course is not completed in the reasonably near future the huge expenditure on it will be irretrievably lost.
These questions relate to the £100 million business loan scheme. In my reply I referred to the criteria laid down for projects which qualify for funding; I referred to the loan scheme only as it relates to this aspect of business. The new operational programme will provide some assistance for golf courses, as it has done in the past. The details of the programme have still to be worked out. I agree with the Deputy that the course in Adare should be completed so that the expenditure to date will not have been wasted. Hopefully, that project will be up and running shortly and further consideration can be given to it in the new operational programme details.
