I did not realise we were coming to Committee Stage and I apologise. My question would have been more relevant on Committee Stage. I accept the Minister's clarification on how the £7.5 million will be spent. I am still concerned that no money can be spent, as the Minister has acknowledged, unless it is provided for in the Estimates. I know the mechanics of spending £500,000 this year. There was £1.5 million provided in the Estimates this year. In next year's Estimates there is £1 million provided. We all acknowledge the financial restraints the Government or any Government in office are under. There should have been a period of time included in the Bill, whether two, three or four years — perhaps two years would be too short — in which there could be grant-aiding up to the tune of £7.5 million.
Shipping Investment Grants Bill, 1987 [Certified Money Bill]: Committee and Final Stages.
Section 3 (d), line 16, says "not more than seven years old." I accept the Minister's assurance on that. There may be something introduced which will allow ships of over seven years of age to qualify for the business expansion scheme. Such provision should be incorporated. A lot of good ships between eight and ten years old come on the market because of restrictions in the countries of origin. If a provision could be written in whereby ships of up to ten or 12 years of age, where every other qualifying aspect was met, could qualify for the business expansion scheme, I would be happy with that.
This is something which may be a matter for the Minister for Finance. We have already brought the views of Deputies to the Minister and will bring the views of Senators to the Minister in regard to introducing a period between seven and ten years for the business expansion scheme. I can certainly say that anything over seven years will not be considered for grant-aid. I think it is important that I should refer again to the SOLAS Convention. Ships built after May 1980 when the Safety of Life at Sea Convention came into force, were constructed in accordance with international safety standards. We would be responsible if it is decided in the 1988 Finance Act that boats between seven and 12 years would qualify for the business expansion scheme. Those applications would be processed and scrutinised as would a boat under seven years. It is vitally important that they comply with all of the conditions.
The Minister accepts my point that Dutch and German ships come on the market and they are not in second-hand condition. Because of conditions in their respective countries they have to hold a ship for eight years according to the grants they have obtained. After eight years some of those ships which are in very good condition come on the market and it would be a pity if Irish companies or Irish people buying those ships were excluded from the business expansion scheme because there was a criterion that they had to be first qualified for aid under this Bill.
The point has been taken by me and we will discuss it with our counterparts in the Department of Finance.
A grant under this Act may be made towards proved capital expenditure which is incurred on or after 1 April 1987. Can the Minister give us an assurance that people who have entered into contracts since 1 April 1987 and may have been in contract situations before this Bill becomes law are eligible for grant-aid under this scheme.
The legislation would be retrospective to 1 April. Applications can only be processed when the Bill is enacted. Anyone who applies will be given every consideration. Anyone in business would be foolish to have entered into a binding contract on the assumption that this Bill would be passed and money would be made available. We will look at all of the conditions and, as I pointed out on section 1, the employment condition will be a vital one. All of the applications will be considered and prioritised.
Will a person who has entered into a contract and who meets all the other qualifying conditions be eligible for aid under this Bill?
Subject to finance being available. The point which I made earlier is that what the Senator is suggesting is that this would be similar to the home improvement grant scheme which was open ended and caused so many problems. There is a limit of £515,000 available this year. If the Bill is not enacted that money will not be available this year. All of these will be processed and decisions will be taken by the Department. Grant-aid will be available subject to the financial position. That is a limitation of £515,000 which would represent an investment this year of some £2 million and odd.
If there is an over demand on grants in the first year, which might happen because it is from 1 April, and there is only £515,000 available, can those applications be passed on to next year, or what kind of system would be envisaged for sorting out the applications? Where there are several qualified applicants, what system would be envisaged for sorting out the applications, and can an application then be passed on to the following year?
If there is a greater demand for grant finance then finance available there will be an overrun into next year. Conditions, obviously, must be a question of labour; the question of the quality of the vessel and the professional advice which we will receive. I can assure the House every application will be treated the same.
The Minister will accept that having regard to the cost of ships and with grant-aid of up to 25 per cent of the cost one application could eat up the entire £515,000 provided this year.
I have no doubt. I would be well aware of the cost of vessels. But, we are dealing with a factual situation and that is the amount that is available. There are conditions. I have spelt them out, perhaps not clearly enough. It will be a question of the quality of the ships, the labour and the professional advice which we will receive. These conditions will be no different from similar type applications in any other Department. I can assure the Senator that every one of these will be treated sympathetically and these factors will be taken into consideration. If the Senator has any fears about applications which will be with us before the end of the year, if finance is not available, then there will be an overrun into next year.
I would also like to point out that there may be companies who will take advantage of the business expansion scheme, which is a £25,000 investment per person which can run into quite a substantial amount of money, who may qualify for this without qualifying for grant-aid. Eligibility for grant-aid will entitle them to qualify for the business expansion scheme. But undoubtedly it is a question of financial constraints.
Section 6 (a) provides "securing that the ship in respect of which a grant has been or is proposed to be made shall continue to be used as required by those conditions." What kind of monitoring system will there be to ensure that section 6 (a) is enforced?
The provision in section 6 gives power to the Minister to impose conditions to ensure that a ship for which a grant has been made continues to be used as envisaged by the conditions of the grant. The grant will become repayable in whole or in part if within a stated period the ship ceases to be used in the applicant's business or the applicant ceases to be eligible for a grant. This period will be at least five years and will be a condition laid down in the administration of the scheme. The Minister's approval will be required for the chartering of a grant-aided ship for more than a single vessel. We will have within the Department a number of officers, harbour masters, fishery officers, officers appointed by the Minister, who will closely monitor the situation. Also, we have the marine surveyors; the harbour authorities. We have the question of crew agreements lodged with the Mercantile Marine Office.
All of these people will make information available to the Minister and ensure that the owner of the boat, whether it be an individual or a company, will comply very rigidly with the conditions laid down. There will be a question of insurance which will be vitally important. We will have to ensure that the Minister's interest is taken into consideration when a boat is being insured and inspections will be carried out periodically. All of these officers will bring this information to our attention and will monitor it.
The Minister has anticipated my next question because I was going to ask under section 6 (3) what would happen if a ship was destroyed or lost. The Minister has anticipated that by saying that the Minister's interest would be covered by insurance. That would be a necessary part of the allocation of a grant.
For the benefit of the House we could elaborate somewhat on that and I will try to give as much information as possible. Not alone is it in the interest of the Minister but it is also in the interest of the owner that any ship which would be grant-aided would be required in advance of payment of the grant to produce documentary evidence to show that the vessel had been fully insured. The insurance will cover the vessel against all eventualities including its total loss and its replacement cost including the portion of its cost which was met by the State's investment and that is the grant. It should be remembered that the principal purpose of the grant scheme will be to increase the size of the Irish registered fleet. It is of overriding importance and must be safeguarded under the terms of the enabling legislation. I am pleased that the Senator has asked for this information. I am glad to be in a position to give this information. Not alone is it in the interests of the Minister but it is very much in the interests of the industry as a whole that the insurance will cover the replacement costs of the vessel, not the original cost and will include the——
Section 8 reads:
(1) Any person who, for the purpose of obtaining a grant under the Act, knowingly or recklessly makes any statement, or who produces any document, which is false in any material particular shall be guilty of an offence and shall be liable——
(a) on summary conviction, to a fine not exceeding £1,000, or to imprisonment for any term not exceeding twelve months, or, at the discretion of the Court, to both such fine and such imprisonment,...
Can a provision be written in that the grant would be refundable or that he would be liable in the first instance to pay back the grant if a person was convicted of such an offence?
There are conditions attached to the grant whereby the Minister can insist that the grant, or a portion of the grant, will be repaid. This section provides that on summary conviction a person shall be liable to a fine not exceeding £1,000, or to imprisonment. The professional advice I have received has convinced me that this is adequate for a summary conviction and that the question of clawing back the grant, as suggested by the Senator, is covered under another section.
Section 10 reads:
The expenses incurred by the Minister in the administration of this Act shall, to such extent as may be sanctioned by the Minister for Finance, be paid out of moneys provided by the Oireachtas.
Can administration costs eat into the funds provided for the grant? That would be very wrong.
This section is a normal provision to enable the Minister to incur expenditure on the administration of the grant schemes. I can assure the Senator that the expenses will not reduce the grant allocation. He need have no fears that the expenses will be such as to reduce the grant allocation.
I thank the Minister for his assurance. I was concerned at some of the earlier provisions whereby the Minister or his agents would have authority to enter boats for inspection, which is necessary, and that could turn out to be very expensive and detailed work.
This is normal practice and it is a normal provision to enable the Minister to incur this expenditure. As I pointed out on an earlier section, we will have harbour masters, surveyors, fishery officers, but I do not anticipate the appointment of any further personnel. The officers who are already there would do this in the course of their normal duties. Unfortunately, there is no question of 20 or 30 of these new ships arriving making it necessary to have an increase in the number of personnel. As of now, I do not see this costing us any additional money. I confirm that the expenses will not reduce the grant.
Has the Minister had discussions with some of the people he named, for example harbour masters, whom we would envisage carrying out those inspections? Have any discussions taken place with people at that level?
Could I say to the Senator that I have full confidence in the officials in my Department and if there is to be any delegation of authority it will be a matter for the officials to have discussions with the officers. I do not think the Senator would expect that I would enter into discussions; I certainly would if it was necessary but this is the normal course. Unfortunately, ten, 20 or 30 of these cargo vessels are not going to arrive in our ports tomorrow morning so it will not create any great difficulty.
Acting Chairman
I thank the Minister and the Senators for their co-operation in finalising the Bill.