Jimmy Deenihan (Kerry North, Fine Gael)
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Question 3: To ask the Minister for Tourism; Culture and Sport if her Department carried out a review of the impact of the departure tax in the context of the development of the recently published Government strategy on Trading and Investing in a Smart Economy; and if she will make a statement on the matter. [36952/10]

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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The Government's framework for economic renewal included a commitment to develop an action plan to drive export-led growth over the coming years. Accordingly, the Government's new strategy and action plan for Irish trade, tourism and investment to 2015, Trading and Investing in a Smart Economy, was drawn up by representatives from the relevant key Departments and agencies, including my Department, Tourism Ireland and Culture Ireland.

This strategy contains targets for job creation, exports, tourist numbers and inward investment projects by 2015 and details on how the Government and its agencies will achieve these priorities and targets. The tourism related elements of the new strategy draw on the robust analysis already carried out by the Tourism Renewal Group, in preparing its report and framework for action, which was a parallel component of the overall framework for economic renewal.

The new strategy does not specifically address the air travel tax. However, it does recognise the absolute importance of access transport for tourism, as well as for trade and investment. The

Tourism Renewal Group reviewed the impact of the air tax, drawing on analyses by the tourism agencies, the tourism industry and the airlines, and recommended that the air travel tax be abolished.

I have discussed the tax in bilateral meetings with the airlines and listened to their concerns about it. The issue has also arisen in meetings with other bodies involved in the tourism industry and was discussed at the recent forum of tourism interests that I convened as part of the development of the Department's new statement of strategy. I have relayed these concerns to the Minister for Finance and will be discussing them with him further in the context of the forthcoming budget.

As Minister with responsibility for tourism, I am concerned about the potential for the tax to affect the competitiveness and viability of air routes to Ireland. From a purely tourism perspective, it would be preferable not to have an air travel tax. However, I appreciate that the Minister for Finance considers it to be an important revenue saving measure, with an estimated full year yield of €125 million.

I assure the Deputies that the issue of the tax is a core part of my discussions with the Minister for Finance ahead of the budget.

Jimmy Deenihan (Kerry North, Fine Gael)
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The introduction of this tax in 2009 coincided with a marked decline in the numbers of people coming to the country from the UK, the US and elsewhere. In Holland, a similar tax was scrapped last year although it was raising more than €300 million because it was felt that €1 billion was being lost to the economy through discouraging people from coming to Holland. Most other European countries have followed Holland's example. In view of the marked decline in tourism, the loss of more than 40,000 jobs and the decline of €1 billion in tourism income, surely the Minister and the Government should make every effort possible to remove this tax.

Is the Minister aware that Mr. Michael O'Leary, who is now CEO of the biggest airline in Europe, has said that if the tax was scrapped he could bring 6 million extra tourists to Ireland over a five year period and increase employment by 6,000 people?

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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Tourist numbers undoubtedly declined since the introduction of the air travel tax. However, there is no evidence to suggest that the two are related.

Jimmy Deenihan (Kerry North, Fine Gael)
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Is it a coincidence then?

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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A number of things impacted on the decline of tourist numbers. One is the economy in other European countries and the United States. The very poor weather at the beginning of this year impacted severely on us and then the volcano affected numbers travelling. If one throws into that mix the sterling and dollar differentials, one sees that many issues impacted on our tourist numbers. We do not have direct evidence to say the tax was one of those.

It would appear that when individual passengers are travelling the tax itself may not be an inhibiting factor in making choices. However, I understand from meeting with airlines that it impacts on their choice of where to put their routes. That is an even more significant issue for us. If aeroplanes are not coming into Ireland, tourists cannot come.

I met Mr. Christopher Mueller of Aer Lingus and Mr. Michael O'Leary of Ryanair. I would be interested to hear more specifically from them what they would do if the tax was removed. If we remove a tax that has the potential to bring in €125 million in a year, we may well have to find that money somewhere else. The would have to make a very valuable contribution to the economy.

Jimmy Deenihan (Kerry North, Fine Gael)
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Would the Minister consider suspending the tax for two years and challenging the airlines to bring in extra people? It would then be in their hands to respond. The second recommendation of the Minister's own review group was the abolition of air travel tax. There is little sense is setting up a review group if the Minister does not listen to it or implement its recommendations.

Would the Minister consider putting the tax on hold for two years and giving the airlines an opportunity to increase their figures?

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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The Tourism Review Group, the tourism implementation group, the Tourism Forum, the Irish Hotels Federation and various tourism bodies have looked for this tax to be removed on the understanding that it would increase the number of passengers coming into the country. That is what the airlines are saying they would be able to do.

I am quite happy to continue my discussions with the Minister for Finance but I would need to know from Ryanair what we will get in return. What will we get by way of additional passengers? What will Ryanair be able to do by way of additional routes into Ireland or making a commitment that routes into Ireland will not be stopped? That would give me the basis for an argument, in the context of the budget, with the Minister for Finance.