Written Answers. - Industrial Development.
Paul Kehoe
Ceist:
18
Mr. Kehoe
asked the
Tánaiste and Minister for Enterprise, Trade and Employment
the consequences for enterprise promotion in 2003 arising from the reduction of ?35 million for the expenditure associated with IDA, Enterprise Ireland, Shannon Free Airport Development Company Limited and county enterprise boards; and if she will make a statement on the matter.
[25103/02]
The Estimate for enterprise development in 2003 has been structured specifically to encourage growth in the economy while at the same recognising the overall imperative of reducing the growth in public expenditure. While we must acknowledge the changed economic circumstances in which we are currently operating, it is equally vital that we protect our economic competitiveness and retain the capacity to generate employment in key sectors. The Estimate achieves that balance.
The cut of €16.046 million in the allocation for IDA Ireland – grants for building operations is somewhat misleading as is it made up of two elements, these being the completion of the payments for a specific project for the provision of interconnectivity capacity and a cut to the industrial property budget of €517,000. The 2002 provision included non-recurring expenditure in respect of the development of broadband infrastructure, amounting to a total of €15.529 million. The contract for the investment in expanded large bandwidth telecommunications assets foresaw that payments should cease in 2002, obviating the need for further allocation of Oireachtas grants in 2003.
The grant for the building operations aspect of the budget amounted to €3.517 million in 2002 and will amount to €3 million in 2003. This is a cut of 15% in the Exchequer allocation to the budget. An Exchequer grant is provided on an annual basis for cash-flow purposes, given the uncertainties of the conveyancing process. However, the building operations budget of IDA Ireland is mainly funded from own resources, through the buying and selling of industrial property at market rates. As such, the consequences of the cut of 15% in the allocation for building operations are not significant in view of the fact that most of the needs of building operations are met from the sale of industrial property i.e. own resources.
The reduction in Enterprise Ireland's allocation for grants to industry must viewed in conjunction with Enterprise Ireland's overall capital grant budget. Enterprise Ireland's capital grant budget is made up from three different elements, namely; Exchequer moneys from subhead D on grants to industry; Exchequer moneys from subhead F on grants for research and development and own resource income.
In 2002, the estimated total for these three elements stands at €165.075 million. The estimated total amount of expenditure by Enterprise Ireland in 2003 will increase to €168.283 million. The reduction in the Exchequer contribution to Enterprise Ireland's grants to industry is balanced by the increase in grants for research and development in line with Government policy in this area. The shift in focus will be reflected in the 2002 outturn whereby €6.7 million was moved, by virement, from Enterprise Ireland's grants to industry to grants for research and development.
While there are proposed cuts in the Exchequer contribution to Shannon Development's budget, the company's view is that with careful management and the targeting of capability programmes for indigenous industry clients, the direct impact of the cuts on the company's Irish enterprise client portfolio can be minimised. Shannon Development also has overall legislated responsibility for the promotion and development of the Shannon Free Zone, which is largely made up of multi-national companies. While the proposed cuts in grant expenditure will require careful management of the grant budget in the course of the year, it is not expected that the cuts will impact negatively on the new investment promotion effort.
The Estimate for County Enterprise Development, the City and County Enterprise Boards for 2003 is €31.015 million. The figure for the current year is €35.805 million. I am satisfied that while it will be necessary for the boards to base their plans and priorities for the year on a reduced overall allocation, they will be able to continue to provide a comprehensive range of services in supporting micro-enterprises at a local level.
Despite the reductions being imposed on the agencies, close examination of the individual elements of those reductions shows that the agencies can continue to fulfil their mandates successfully in 2003, albeit with a need for a re-prioritisation of tasks and measures.
