Seanad debates

Friday, 5 December 2008

1:00 pm

Photo of Denis O'DonovanDenis O'Donovan (Fianna Fail)

I do not claim to be an expert on the economy but I noted one of the headlines in today's business section of The Irish Times stated: "Banks to reveal details of bonuses." I find it difficult to accept, after what has happened in the past three years in the banking sector, that any bank would be considering giving any bonuses to any of its directors or chief executives. Some of them should be facing charges of mismanagement and falsely massaging the economy, domestically and internationally.

The knock-on effect from the sub-prime crisis in America has had a serious impact. Any lending institution that knowingly loaned money, especially to young people, to buy property on which those people now face negative equity is bordering on being criminal. In the 29th Dáil I chaired the All-Party Committee on the Constitution which examined and reported on property rights. Some of the conclusions the committee came to in its 2004 report were, however, ignored. People laughed at the findings of the 1970s Kenny report. The committee's conclusions were allied to many of his. Regrettably, not even some of them were taken on board. Some day we may revisit his report and say Kenny was not too far off the mark.

Many economic experts told the committee that property prices would eventually find their equilibrium. The word "equilibrium" seems to have vanished into thin air. There is now a serious problem in the property market where up to 30% of home owners are in negative equity. I accept many of these problems are not of our own making.

Coming from a coastal area, I see much potential in the development of mariculture and aquaculture to create jobs. Fifteen years ago when we began to nourish the infant mariculture and aquaculture industries, it was proposed to produce 25,000 tonnes of rope mussels. It peaked at 10,000 tonnes and never went further. At the same time, the Chileans began to farm salmon, an industry not native to the area, taking ideas from Ireland and Scandinavia. Now Chile is the leading global exporter of farmed salmon. In Puerto Montt, a remote town 500 miles south of Santiago, up to 40,000 jobs have been created by the industry. While the Spanish and the French are following suit, Ireland seems to have stalled. Up to 80% of fish landed in Ireland is exported blast frozen, mainly to Spain.

We must examine how we can add value to this export market. It is an argument I have put forward. I do not want to confuse the Minister of State about coastal issues but, thanks to negotiation by our Minister for Agriculture, Fisheries and Food, we are getting an additional 16,000 tonnes of mackerel. I argue that the polyvalent section and smaller boats from Rossaveel to Dingle should get 50% of that. The reason is that we had 13 factories processing primarily mackerel but also herring onshore and there are now four left in Rossaveel, Dingle, Union Hall and Castletownbere. If this sector gets the extra 8,000 tonnes of mackerel quota, it will promote jobs in rural areas. This might be a simplistic answer but we must examine it. At the height of the Celtic tiger economy we forgot about niche markets.

I have referred to rustic areas but the area in which we have made substantial developments is the country market and cottage style industries. In west Cork, there are 12 or 14 enterprises making cheese and yogurts that are known nationally and internationally. These cost very little to the State to set up and can be promoted and supported with very little capital input. This is where jobs can be maintained. Many of these have made their markets themselves. The Fuchsia brand is wonderful and I hope it will be extended and developed further. The promotion and support of such indigenous industry should be undertaken.

Another area that is a hobby horse of mine is energy. At the minute the price of oil has dropped substantially but we must look to the future, not just next year and the year after. We do not know when the price will go up or down. It is outside our control. We have significant potential in alternative energy, such as wave energy. The project in Galway should be developed. We are surrounded by water and there is great potential. We also have major potential in wind and solar energy. The plan of successive Governments was to provide 30% of our energy by alternative means. If we do not, the price of oil will affect us badly again. It will affect industry and the economy. At the moment its price suits us fine but if it were to exceed $150 a barrel, the impact on our struggling economy would be severe.

I accept we are going through difficult recessionary times. I emigrated in the late 1970s because there was no work available for me. The biggest fear facing us is job losses. We had the success of creating 1 million jobs in the past ten years or so. If the number of people on the live register rises to 8% or 9% of the workforce and our jobless figure rises to in excess of 300,000, it is a frightening vista.

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