Olivia Mitchell (Dublin South, Fine Gael)

I, too, welcome the opportunity to speak on the Bill. Albeit fairly technical, the Bill deals with the system of supports and incentives that have been fundamental to our industrial development over the years and that, hopefully, will be in the future.

I agree with my colleague, Deputy Varadkar, that there is and always will be a certain tension between the need for oversight by Government, because we are raising spending thresholds, and the need to allow the agencies flexibility to be able to respond to changing situations. My concern is that viable projects will come forward that will be able to avail of the higher thresholds, a concern which I am sure many of us share.

When the Tánaiste and Minister for Enterprise, Trade and Employment, Deputy Coughlan, introduced this Bill in the Seanad she stated that to sustain and grow the enterprise sector, Irish based enterprises will be encouraged and assisted to continue the progression to high value added activities and to continue to increase productivity through investments in human capital, technology and innovation, and our comparative advantage will increasingly lie in the production of knowledge intensive industries. I refer to my brief, tourism, because in no sector is it more true than in tourism that we need to move up the value chain. This industry is the largest employer in the country, a fact often forgotten, but it contributes only between 3% and 4% to GDP. It should be a net export service industry but since 2003 income from tourists is less than Irish tourist expenditure abroad.

In the tourism industry, we need to become much smarter in what we offer and in how we market and deliver the product. We are simply not getting the contribution from tourism we should in terms of bang for our buck. We need to not only reduce costs to attract more visitors, which of course will be a considerable challenge when the tourist market is contracting anyway, but also to add value to the product so that we become a quality destination selling what is a unique holiday and experience for which visitors are willing to pay more.

A value-for-money holiday does not necessarily mean a cheap holiday. We need to move from providing the sliced pan of holidays to the black olive focaccia of holidays. Of course, we need the cheep holidays but we also need to move up the value chain if we are to provide quality jobs in the future and if tourism is to become a net contributor to the Irish economy. As has been stated on many occasions by Ministers, the future impetus for growth, if we are to ever have growth again, will come from the services sector generally. I often wonder has the Government forgotten that tourism is a service industry giving more employment, as I stated, than any other indigenous industry. I recently read the Government strategy for services, "Catching the Wave", in which tourism hardly got a mention. I appreciate that the Minister promoting this Bill is not responsible directly for tourism, but she is responsible for employment and for enterprise. It is not often there is an industry that gives us the opportunity to import new taxpayers, which tourism does, and it is certainly not a gift horse that we should be looking in the mouth.

The time has come to look again at the structure of State agencies which support the tourism industry. The current structures lack leadership and cohesion, both of which are vital to an industry which is intrinsically fragmented. I appreciate the provenance and the motivation behind the separation of the marketing and product development agencies, Tourism Ireland and Fáilte Ireland, but this arrangement is not serving us as well as a single agency could. When one adds Shannon Development and Dublin Tourism, not to mention the five regional bodies, it is not possible to have the unity of purpose and single-minded focus which is badly needed. We must consider if our interests might be better served through a single agency.

The regional divide, let us face it, is not being closed; it is widening. Ever fewer tourists and jobs are going west and the economic viability of Shannon Airport is now very much in question. It is difficult to believe that we are getting the optimal use of funds when there is such a fragmented approach. It is accepted that the region's indigenous manufacturing industries — this is what the Bill is about — formerly under the remit of Shannon Development would be better served by the backing of a single nationwide large enterprise body such as Enterprise Ireland and the same sort of move to a single agency would offer similar benefits to the region's tourism industry. Somebody must be in charge of the multifaceted problems of regional tourism and a body needs to take responsibility.

This Bill's purpose, technical as it is, aims to equip the State to deal with rapidly changing situations and emerging economic problems, and the Department of Enterprise, Trade and Employment must be the spearhead of meeting those challenges and, crucially, of trying to stem the flow of jobs out of the country. I am increasingly of the view that responsibility for tourism should be within the Department of Enterprise, Trade and Employment. Somewhere along the way sight has been lost of the fact that this industry is our biggest provider of jobs, and being amalgamated with arts and sport contributes to that view. Arts and sport are significant contributors to tourism and they have a significant job content, but State support for them is motivated not solely by commercial or economic considerations but because of their intrinsic value. We must increase our support for arts and sport and aim to widen participation, but the reality is the policies and the skill sets required to do that are wholly different from those required to produce and sell a modern tourism product.

In this Bill the level of supports, which reflect European policy as much as our own, are much larger in the BMW region for the good reason that is where industry and jobs are most needed, but it is also where the tourism jobs are most needed. It is also where there is the greatest potential for expansion. We already have the basic infrastructure in our natural environment and in recent years there has been great investment in the built environment. The sight of hotels and restaurants closing around the country, perhaps never to be revived, is tragic and unnecessary.

I fully support the concept of the State taking shares in high-potential start-up companies and I support increasing the thresholds above which direct Government approval is required by State agencies. It makes sense that the Cabinet should not have to bother itself except with the larger, more strategic projects and that the grant-aiding agencies such as IDA Ireland and Enterprise Ireland should be able to get on with the bulk of such decisions. Like my colleague, Deputy Varadkar, I find it ironic that we are legislating for this provision today while every other agency in the State, the local authorities, the NRA, Departments, including the Department of Education and Science, as I read in today's newspaper, must get direct approval from the Department of Finance before they can spend virtually anything. One wonders what that will do to the Department of Finance in terms of clogging up its workload. If any Department has enough to do, it is the Department of Finance.

The thresholds for individual research and development grants are to be raised by up to €7.5 million, representing a trebling of investment. This is highly desirable and is exactly the kind of business we must chase. If we get it, it is the kind of business most likely to stay. Companies involved in research and development are inclined to cluster so there is great potential for us to build on some early successes we have had. We are already beginning to make a name for ourselves in medical and health technology. The Bill updates a number of monetary thresholds. That is its primary purpose, as well as transferring the shares to Enterprise Ireland. Although the Minister says it does not reflect a change in policy direction, it underpins such a change. It reflect the fact that we no longer assume we will chase after inward investment on the basis that any job is worth chasing. We have to target jobs that are higher up the value chain and sustainable. IDA Ireland and other agencies appreciate that.

It will take more than generous grants to make Ireland an innovation and knowledge-driven economy. We must raise the standards in our universities and there is much discussion on that area. Crucially, we must invest in our schools, and even in preschools, particularly in science and maths teaching for boys and girls. It is particularly worrying that the numbers choosing the maths and science subjects are still falling because we will never build a smart economy if children do not take up these subjects. Education is fundamental to a research and development economy. We cannot begin by giving training grants at company level, welcome as they are. The kind of training we need for the future must begin in the teacher training colleges and our primary schools.

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