Olivia Mitchell (Dublin South, Fine Gael)

I wish the Minister well on her first questions here in her new Ministry.

I realise that she is at least partly familiar with this problem, which has arisen, I suppose, as a result of a treble whammy - the scrappage scheme, the general recession and the lack of credit in the economy. She stated she would like the industry to refrain from putting up prices. The reality is most of them will be put out of business. At this stage it is a question not of putting up prices, but of trying to stay in business.

The impact of this is catastrophic in that there will be a maximum of between 10,000 and 12,500 cars available when at least 20,000 are required. Already cancellations of holidays are resulting, particularly from the American market. Obviously, Americans come for longer than a weekend in most cases and approximately 45% of them hire a car. Of those, the vast majority need automatic transmission cars, the shortage of which is even greater. If we are to lose that kind of business, it will have a significant impact throughout the country.

The other area that will really suffer is the bed and breakfast accommodation business, which is already suffering badly and 80% of whose customers hire a car. It will have a considerable impact right around the country, not so much in the cities but further afield.

According to conservative estimates of the impact of this, 1,500 jobs will be lost to the industry, €28 million will be lost in Government revenue and more than €120 million will be lost in revenue to the industry.

The Minister stated that the industry should not overcharge, and that is good advice assuming they can stay in business. However, the Minister for Finance suggested that rather than change the general taxation system or grant exceptions in the general area of taxation, a solution could be found in a direct subsidy from Deputy Hanafin's Department. I do not know whether he has communicated this to the Minister, but I wonder if she has any plans in this regard. If she has such plans, now is the time to announce them given that the season started effectively on St. Patrick's Day and Easter is approaching. If the Minister has plans to give a subsidy that would encourage the motor industry to provide cars at a reasonable price to the car rental industry, now is the time to announce them.

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