Other Questions. - Euro Changeover.

P. J. Sheehan


13 Mr. Sheehan asked the Minister for Tourism, Sport and Recreation the plans, if any, he has to make grant aid available to hotels and guesthouses towards the cost of conversion to the euro. [15149/98]

The Department of Finance is the Department with overall responsibility for co-ordinating Ireland's preparations for the changeover to the euro, encompassing preparations by the Irish public administration and helping the rest of the economy to prepare itself for the changeover.

A number of initiatives in connection with the changeover have already been put in place, including: the establishment of the Euro Changeover Board of Ireland, ECBI, on 5 May this year, to oversee the detailed implementation of the changeover and to provide public and consumer information; the launch of an £800,000 national information programme run by the ECBI, designed in phases to provide information on the changeover to euro as the single currency project proceeds; the making available by the ECBI of a sum of £200,000 to assist non-governmental organisations meet the cost of approved activities to promote awareness of the euro among the public; and, a special business awareness campaign run by Forfás at a cost of £400,000 which aims to provide businesses with the information they need to prepare themselves for EMU and the changeover to euro.

While funding has been made available for an awareness campaign to inform business and the public of what is involved in the euro changeover, the Government, in line with the intentions of the other ten countries in the euro 11, has no plan to provide special help for businesses generally to make the changeover. It should be borne in mind in this context that EMU should bring significant benefits to businesses. Interest rates should, in general, be lower within EMU than if Ireland were not a member. Exchange rate uncertainty will be eliminated for trade, tourism and investment among the member states participating in EMU. Furthermore, the single currency will mean the need for currency conversion will no longer arise within the euro area. These benefits will be ongoing while, of their nature, changeover costs will be once-off.

I am somewhat disappointed with the Minister's reply. Hotels and guesthouses are very vulnerable particularly given the nature of Irish tourism and climatic conditions. Many family run hotels are barely ticking over and the changeover to the euro will entail a good deal of expenditure on their behalf. Surely there is some avenue the Minister could explore which would provide funding towards this beleaguered sector of the tourism industry. The sector is already in competition with seaside resort and urban renewal schemes and is receiving no assistance whatsoever. If assistance is not provided, small hotels and guesthouses will find it almost impossible to carry on. The euro changeover will be the straw which will break the camel's back. Small hotels and guesthouses are the backbone of the industry and it is a dismal reflection on the Minister if he cannot provide assistance to them.

The Deputy is making a statement, not asking a question.

On whether the Government will provide assistance in this area, the answer is a categorical no. If people go into business, they must be prepared to pay the price. The Deputy's question is akin to saying that if the price of bed linen were extraordinarily expensive in one area in comparison with another, the Government should step in to subsidise costs. That is not what is involved in business.

I disagree with the Deputy that the changeover will entail phenomenal costs; it will not. The tourism sector is the one area which will benefit from the euro changeover for the reasons I have outlined.

It seems to be a case of "live horse and you'll get grass".

In the context of the Minister's response and his earlier response to the strategy report, how does he intend to fund the development of tourism post 1999? He stated he was present at the launch of the report but that it failed to address possible sources of funding.

Will the Minister avail of this opportunity to scotch a rumour in the industry that one of his advisers is advocating the imposition of a bed tax? Will he put that rumour to bed once and for all and state he is not in favour of a bed tax for the hotel sector to fund the future development of the industry?

The Deputy has moved far away from the content of Deputy Sheehan's question.

The employment of consultants was discussed earlier. While I acknowledged the consultants' report was a very good one, it failed to address the question of who would pay. An estimated £740 million will be required to run the tourism industry in the next six years and certain limitations will be imposed after 1999.

I want more private sector involvement in the funding of the tourism industry. The industry is developing rapidly and we cannot afford to decelerate it. This matter, together with the issue of bed tax, will be discussed in conjunction with the industry, the unions, the Department and Bord Fáilte. A document is currently in circulation within the industry and I am awaiting reaction to that. I am confident that, given the recent success of the industry, a positive conclusion will be reached.

So the Minister is not ruling out the idea of a bed tax?

That is a matter for discussion.

That is very disturbing.