I do not think the Deputy is trying to imply that the Central Statistics Office is gathering information to suit the Government; during the debate on the Statistics Bill all Members of the House made it clear they were happy that the Central Statistics Office was independent. The points raised were serious and I treated them as such. I sought information from the Central Statistics Office about the views of commentators. Deputy De Rossa mentioned some of them. If he wishes I can attempt to give an explanation of where the commentators went wrong. I mentioned the figures for export growth. In that case they got it wrong by using the monthly rather than the annual figures, not taking into account the differing price trends at the end of 1993.
Another criticism is the inconsistency with other economic statistics, most notably the industrial turnover index; the inconsistency between the increase in the exports of hi-tech products and the turnover of hi-tech industries; the impact of transfer pricing on exports artificially inflating the level of national income and the growth rate; the high export surplus resulting in a current account surplus in the balance of payments inconsistent with reserves; the unacceptably high increase in trade with non-EU countries in the year 1992-93. I can refute each and every criticism but I do not want to be accused of wasting the time of the House. Nevertheless, it is important to try to answer each one individually.
On the question of inconsistencies with other economic statistics, notably the industrial turnover index, that point was raised initially on the industrial turnover and export figures. Ideally data collected from different sources at different times should be consistent, but is rarely consistent because of information from different sources, different survey approaches and so on. For example, in the industrial turnover and the merchandised exports statistics differences can arise for a number of reasons: specifically turnover as surveyed in the monthly industrial inquiry is defined as turnover of manufactured goods and goods purchased and resold without further processing are not included. That would lead to some distortions. There may be some slight difference if companies based in Ireland import goods, perform services on them and then re-export them without taking ownership, when the turnover recorded in the monthly industrial turnover is the service fee charged to the owners of the goods. If Irish companies take goods back for repairs and then return them, the turnover records note only the repair charges whereas the full value is recorded in the merchandised import and export statistics. In addition, the industrial turnover index will incorporate rebates to companies which are not always reflected in export figures. Exports are also recorded at market prices whereas the turnover reported in the monthly production statistics is valued at factor costs. Significant differences in timing can occur between the time produce is sold into intervention and sold some years later. The above are some of the reasons the figures may not be consistent.
If one considers the inconsistencies between the increase in exports and turnover of hi-tech products — and this was particularly criticised — in addition to all the other reasons I outlined to explain the differences between the two series at an aggregate level, comparisons at a sectoral level are less likely to produce comparable results because of differences between the industrial classifications used in the industrial turnover index and commodity classifications. For example, a computer manual may be produced in the computer or printing sector and recorded in the turnover of that sector but is exported with the computer and included in the export of computers. There was a criticism that transfer pricing on exports was artificially inflating the level of national income and growth rate. Everybody would agree that there is an element of transfer pricing that is difficult to quantify, because it is an internal practice of multinational organisations and, by definition, a hidden activity. It is almost impossible, therefore, to determine its extent. However, on discussing this matter a number of factors suggest that it might not be as widespread now as previously. The increase in export sales relief from zero to 10 per cent tax rate reduces the attraction of engaging in that practice. As well, most capital exporting countries have become more vigorous in policing it, the US being one example.
I have dealt with some of these matters in detail but it would be fairer to respond to the Deputies more fully by letter. There are explanations as to why various statistics are not consistent but they are reliable and whatever differences exist are small. The statistics are checked and rechecked and the checks carried out by the CSO and the Revenue Commissioners have not indicated a huge need for their revision.
I am sorry the answer is so long.