Jim Walsh (Fianna Fail)

Cuirim fáilte roimh an Aire go dtí an Teach chun an t-ábhar tábhachtach seo a phlé. As usual, I find myself agreeing with most of the common sense points made by my colleague, Senator O'Reilly. Invariably, he puts his arguments cogently, especially with regard to ensuring value for money from various public services, which is essential.

I take this opportunity to compliment the Minister. He was the first to take the initiative to involve the Houses, through the joint Oireachtas committees, in recommending nominees for various boards. I believe this was a good departure and something Members of this House had called for on several occasions. We did not suggest specifically that we should be involved but at least that there would be greater transparency in the process. As a member of the committee, I am aware of how seriously the committee took that exercise. We trawled through many applications. Ultimately, it struck me that there was a dearth of business acumen and that issues of conflict of interest arose. This is understandable because people who have a connection with the business are probably more inclined to seek to be involved, which is also understandable. The Minister would do well to evaluate the process to determine how well we worked and if there were shortcomings. I note that in the list of desired qualifications for the nominee to the board of TG4 there was no mention of business experience or financial acumen in the short-list we received for the position to compliment the other nominees already made. While it is important and good that people have experience of the arts, disability issues and a whole ream of other issues, which I do not decry, a sine qua non for appointment to any board should be the ability to play one's part commercially, to understand accounts and, therefore, to be able to contribute in an enlightened fashion to the board. We should place extra emphasis on these skills, especially in bodies which are seriously financially challenged, such as some of our State broadcasters. However, the exercise is good and as it develops we will improve it.

To some extent, these views came to mind because of the failure of the board of the BAI, Broadcasting Authority of Ireland, to interpret in any way the serious financial and economic difficulties which most small businesses encounter. The authority's budget increased from €5 million in 2009 to €7.6 million in 2010 and when the new board more or less rubber stamped this, it set off alarm bells in my mind. Only for the intervention of members on the Joint Committee on Communications, Energy and Natural Resources, the budget would have been approved. Through the committee we got the chief executive to redo his figures and come back to us again with a reduced budget. I maintain what he came back with was too high but at least there was a reduction. To some extent, we were doing what the board should have done.

Every Minister has a range of State bodies that report to his or her office and Department. The Minister, Deputy Ryan, oversees a considerable number of important bodies in this regard. It might be a useful exercise to meet these boards to ensure they fully recognise the extreme financial difficulties which exist such that they apply their minds to cutting wasteful expenditure and to trimming the sails of many of our semi-State bodies. The same should apply in the State sector. While I criticise this issue a good deal, I understand it. I have seen cases in the private sector in which during the good times businesses allow their costs to slip because revenues are flowing in and, therefore, the same pressures and focus to keep costs under control do not apply when there are more than ample revenues to cover those costs. Such an occurrence may arise in a situation where one tots up expenditure on the one hand and calculates revenue on the other, but the normal checks and balances which apply through competition are missing. We need to ensure other pressures are brought to bear to see that people play their part in that regard.

The budget of the Broadcasting Authority of Ireland, as published online, gives figures for the 12 months to December 2010 but does not give comparative figures for 2009. I know this is a new body but there must be accounts for its predecessors the Broadcasting Commission of Ireland and the Broadcasting Complaints Commission. It would be helpful to have those figures because they would pinpoint where the cost increases have occurred. I am mindful, as the Minister said in his statement, that additional functions have been required of the BAI and these give rise to cost issues.

Sometimes I agree with Senator O'Toole but more often I do not, because he takes a simplistic approach. He probably typifies the thinking of those who do not come from a commercial background, that everything is a matter of resources. This view holds that where there are additional functions one must have additional people to do them. In the private sector people are working harder and longer and taking on more responsibility. They are happy to do this to secure their jobs and employment. We need to transfer that ethos and culture to the public and semi-State sectors.

I am mindful that we are making decisions in these Houses purely by calculating a cost and passing it on. This has the effect of passing some of the cost ineffectiveness and inefficiency of our public sector on to the private sector. This is happening in the health service and in local government. I have experience of those areas and I am member of the Houses of the Oireachtas Commission. It is a matter of continuing concern that, despite the greatest economic downturn we have experienced in our lifetime, the penny does not seem to have dropped. We need to clip our wings with regard to cost inefficiencies and to have a continuous strenuous eradication policy. That is not happening and there does not seem to be a recognition of the need for it.

The principle of the regulated paying for regulation is one I subscribe to. I do not disagree with that. I know it was a fundamental part of the change from a system where the State paid for the regulation of the broadcasting system to one where the industry itself must subscribe. This puts an onus on the industry to operate effectively and efficiently with regard to costs.

The BAI budget, as outlined, does not enlighten. Perhaps it is not intended to do so. Figures for some expenditure headings are as follows: Finance, Governance and People, €3,401,040; Policy, €380,950; Communications, €376,950 and; Office of the CEO, €285,627. We are not told whether the last figure covers expenses, salaries or what. We need more information, or accompanying notes, so we can understand and challenge the figures. If the figures are necessary or required then the board and the CEO will be in a position to defend them but we need to be in a position to query and question them. We are not in that position yet.

Aspects of the budget apply to public interest broadcasting. Costs which are not involved in the regulation of the industry are now being passed on. I ask the Minister to take a look at this so the industry pays only the cost involved in its regulation and not additional costs for some sort of public interest purpose which does not specifically relate to regulation. There might be an argument that some of those costs might be funded from the licence fee.

I was unaware that the BAI has a statutory function and can raise its own statutory instrument. I had assumed that applied specifically to Ministers who are accountable to the House. This concerns me.

I also have concerns about the manner in which the levy is applied. The application of funding at 2.5% of turnover is a huge imposition on business. A downturn in business will have a more severe effect on the bottom line than on the top line, because some charges are fixed. A levy on turnover rather than on profit can have a severe effect. Broadcasters that are only marginally profitable could find themselves in a loss because of the application of the levy and the manner in which it is calculated. This concerns me. Let the levy be calculated as a percentage of turnover, but subject to a maximum of 10% of profit, for example. I know profit can be manipulated to some extent. However, the statutory instrument is very specific with regard to the qualifying incomes and I am sure it could be equally specific with regard to qualifying expenditure. Capping the levy at a percentage of profit would take account of a situation where the cost of the levy was the straw that broke the camel's back and put a good broadcaster out of business. I hope this will not happen.

One of the great initiatives we have taken has been in the area of local radio. Listenership to local radio proves its success. I hope we might also, some time, have regional television. Some people may feel the country is too small for that, but Northern Ireland has two TV channels. One is a state channel but UTV, although I am not familiar with its accounts, is a pretty good channel and broadcasts good programmes.

The economic crisis must change the way we think and how we do things. Do we need a BAI? Could someone in the Department not issue the licences and could the Minister not be accountable for that? Do we need this apparatus, and the BAI is only one of many such State bodies? On balance, we probably do need it but we should challenge these assumptions.

Many people talk about the impartiality of the national broadcaster, or lack of it. I have been a critic of the national broadcaster for its failure to convey the message of the global downturn and where we fit in relation to it. I saw a very good programme on television last night called "The Warning", which dealt with the issue of regulation in the United States. It featured the regulator of the Commodity Futures Trading Commission, Brooksley Born, and her difficulties with Alan Greenspan and others in the Treasury Department, such as Larry Summers, who is now back in the Obama administration. It showed how the Treasury felt that the market could decide everything and that regulation was not needed. It was an enlightening programme. It was broadcast at midnight, so I am not sure how widely it was seen.

A few of those programmes have been made.

I saw an episode of a programme called "Aftershock" last week. The broadcasters went to Iceland and talked about an investigation into banking in that country. We got no feel of the content of the report, other than that the Prime Minister was obviously one of the individuals named therein. We got nothing or no feedback from the programme. It was almost as if the whole programme was blighted by editorial intent that cut across what should be done.

Should we be asking ourselves whether we need so many television and radio stations as part of the national broadcaster? Would it be enough if Radio 1 and TG4 comprised the national broadcaster and if the rest that currently comprise the national broadcaster were privatised? We need to examine how we are doing things. As a consequence of our doing so, the imposition on taxpayers through the application of the licence fee might be relieved somewhat. We need to start with a clean sheet. Unfortunately, we sometimes start from where we are and move on without deciding what costs incurred in the past may not need to be incurred in the future.