Priority Questions.

Area Based Partnerships.

1. Mr. Allen asked the Minister for Tourism, Sport and Recreation if he will make a statement on the future of the area based partnerships. [11718/99]

Minister of State at the Department of Tourism, Sport and Recreation (Mr. Flood): I propose to take Questions Nos. 1 and 4 together.

The European Council recently agreed a funding package of Community Support for the 2000-2006 period. While the outcome for Ireland was good given the extreme difficulty of the negotiations, the level of EU Structural Funds available over that period will be approximately half that available to Ireland under the current Community Support Framework.

Work has already commenced on agreeing priorities for EU co-funding under Ireland's next national development plan and on clarifying the Commission's new procedures for the next round of Structural Funds. There is a separate national consultation process to be undergone, inclusive of the social partners, while the creation of new authorities for the two new regions and the possibility of regional operational programmes add further necessary layers to the planning process. Until such time as this overall process is completed, it is difficult to give any indication of likely levels of EU financial commitments and programmes, including what their commitment will be to current EU funded programmes.

The Deputies can rest assured that the Government will not be deflected, however, from its commitment to tackle social exclusion in deprived areas and of ensuring that the overall objectives of current programmes remain a priority. In particular, very good work has already been done by the partnerships and ADM-supported community groups in developing a new and innovative area based approach, which is currently being considered in the context of ongoing work on local government reform.

Mr. Allen: Will the Minister of State take into consideration that 800 full-time staff are employed by the 38 partnerships throughout the country as well as 500 other staff under the community employment scheme? Has he taken into consideration that the partnerships are a national response to long-term unemployment and social exclusion in urban and rural areas? Does he realise that if an early decision is not made about them and if the uncertainty about their future is not eliminated, staff, whose skills and expertise have made the partnerships so successful, will be dispersed and lost to the scheme? Will the Minister of State give a guarantee in the House today that the 38 partnerships at present operating will survive under the next national development plan? Will he confirm if partnerships will survive in areas with Objective One status and areas that will not have that status?

Mr. Flood: The Government recognises the tremendous work already undertaken by the partnerships and ADM-supported community groups. That is a matter of record in any of the areas in which they operate. I agree with the Deputy they have made a significant contribution in their areas of responsibility. The future position of partnerships and the supported community groups will come into focus in the drawing up of the next national development plan. The Taoiseach indicated it is the Government's firm intention to continue to direct a focus of attention at areas of disadvantage, both rural and urban. Given the experience of the ADM-supported community groups and partnerships, it is important that focus should continue.

Regarding the future staffing arrangements of the partnerships, the drawing up of the next national development plan will have to take into account the issue referred to by the Deputy. That plan, which is driven by the Minister for Finance, is at an advanced stage.

Mrs. Moynihan-Cronin: Will the Minister agree there is uncertainty among staff in the partnerships because they not been given much direction as to the future of the partnerships? Will staff be laid off in the transition period - when the present funding has been used and the process is finalised - and recruited later if required when the new funding is in place? Will the Minister of State assure the partnerships that transitional funding will be made available to them until such time as this process is finalised?

Mr. Flood: No decisions have been taken with regard to the future funding of local development arrangements. That will be part and parcel of the national development plan. I ask the Deputy to take into account the positive comments I made about the role of partnerships and supported community groups.

Recently Planet, the organisation representing the area based partnerships, wrote to the Taoiseach outlining its legitimate concerns, as raised by the two Deputies. The Taoiseach responded in detail to its letter and he requested that I meet with its representatives and I intend to do so on 17 May.

Mr. Allen: Despite all the talk of the Celtic tiger, vast areas of this country are still affected by high unemployment and social exclusion. The Minister of State praised the partnership programmes and their performance over the past number of years, but mere lip service and praise are insufficient. He avoided answering part of previous question. Will he give a guarantee in this House today that the survival of the existing 38 partnerships will be guaranteed under the next national development plan? Will partnerships in areas outside those that have Objective One status survive? I ask the Minister of State to give a specific answer to a specific question.

Mr. Flood: I can give the Deputy a specific answer. It would be foolhardy of me to give a blanket commitment now such as that being sought by Deputy Allen and Deputy Moynihan-Cronin. That would pre-empt the national development plan. I can only put on the record the experience to date of the partnerships and the community groups and state they have made a significant contribution. That must be taken into account in tackling the issues referred to by Deputy Allen, particularly in relation to areas of disadvantage and neglect. That is the Government's firm intention. The Taoiseach stated we intend to continue to target these areas because they still have a considerable distance to go in terms of fighting and dealing with the effects of social exclusion.

Mrs. Moynihan-Cronin: I welcome the Minister of State's comments. I am sure when he meets representative of Planet on 17 May the main concern will be about the transition period. I am sure he will agree that is the main problem facing them. He said there will be a commitment to the partnerships but that EU funds will be halved. A large number of the staff are leaving the partnerships because of the uncertainty prevailing. Many members of the staff who have given their time and have valuable experience are concerned about the transition period. They hope the partnerships will continue in place after the next round of EU funding. They want a commitment to the partnerships in respect of the transition period and the funding to ensure that comes from central Government rather than Europe.

Mr. Flood: As the Minister of State responsible for area based partnerships, I am concerned whenever very skilled staff leave to pursue alternative careers. In this case there are a number of reasons for such departures. Individuals who have been part of the partnership process have benefited greatly by being part of it. Some of them are furthering their careers by availing of other opportunities that have opened up and they are entitled to do that. I accept any transitional period is always a period of uncertainty and individual members of staff may make decisions based on what they perceive to be the future. The national development plan will deal with the issue of uncertainty raised by the two Deputies. We are anxious to ensure the plan is brought forward as quickly as possible so that specific issues which cause uncertainty can be dealt with. A transitional period is difficult for any organisation. The Government is, however, committed to the partnership process and, through the national development plan, we will be able to continue that commitment, particularly in targeting the areas of neglect and social inclusion.

I will take into account the comments made by both Deputies when I meet Planet and indicate to its representatives that these points were raised.

2. Mrs. B. Moynihan-Cronin asked the Minister for Tourism, Sport and Recreation the areas of the tourism product he will prioritise with the next round of EU Structural Funding; and if he will make a statement on the matter. [11789/99]

Minister for Tourism, Sport and Recreation (Dr. McDaid): My Department produced a discussion paper last March, entitled "Strategy for Tourism Development in the context of EU Structural Funding 2000-2006". The paper proposes objectives, and a strategic approach, for future investment in product development, marketing and training, based on a range of possible policy actions to meet those objectives. The new directions suggested are founded on a selective approach based on environmentally sensitive sustainable tourism and regional development.

Precisely how this will be reflected in measures under the new national development plan remains to be seen. Work has already commenced on agreeing priorities for EU co-funding under Ireland's next national development plan and on clarifying the Commission's new procedures for the next round of Structural Funds. There is a separate national consultation process to be undergone, inclusive of the social partners, while the creation of new authorities for the two new regions and the possibility of regional operational programmes add further necessary layers to the planning process. Until such time as this overall process is completed, it is difficult to give any indication of likely levels of EU financial commitments or to what programmes or measures they will be made.

The process will also, of course, have regard to the paper prepared by the Irish Tourist Industry Confederation, "Strategy for Growth beyond 2000 - A Strategic Framework for Irish Tourism" and to Bord Fáilte's business plan for Irish tourism marketing 1998 - 2003.

In arriving at a proposed strategic approach to product development specifically, my Department took account of views expressed by the European Commission that in times of rapid growth, the industry should be capable of, and expected to, respond adequately to market investment needs. All the indications from the Commission are that in the post-1999 period, the industry will be expected to contribute increasingly to its own product development, responding to the needs and demands of the market. Account was also taken of the European Commission's priorities, including environmental protection, job creation, competitiveness and regional development.

The proposed strategic approach for product development in the post-1999 period, as set out in the discussion paper, will therefore be biased towards areas classified as either developing or undeveloped tourist areas; based on differentiated aid levels which are likely to be less than current levels; have an agreed level of product investment for the 2000 - 2006 period based on a much higher proportion of investment from the industry itself and less from the EU; reinforced by the selective and targeted use or adjustment of tax-based incentive schemes, subject to Government and EU approval, to stimulate physical developments consistent with sustainable tourism goals; and reliant on market forces to fund product investment in established tourist areas. State support may be provided, however, for an overall integrated planning and management approach to alleviate success-related strains such as congestion etc. based on a product mix reflecting thematic programmes, such as special interest holidays and dedicated health-leisure centres, as opposed to a project-based approach.

As part of this framework, my Department will closely monitor the new tourism and environment initiative which was established under the operational programme for tourism in response to the mid-term evaluation of the programme. It is envisaged that the initiative will play an important role in developing future tourism policy in the next round of Community Structural Funds.

Precisely how this will be reflected in measures under the new national development plan remains to be seen and will depend to a large degree on the outcome of the consultation process which I have outlined.

Mrs. B. Moynihan-Cronin: When will the process of consultation be completed and who will be consulted? Will the Minister ensure regional imbalance is addressed in the consultation process? The majority of tourists stay in Dublin and do not go to the regions. There are regions of this island which are beautiful but which have no tradition of tourism. These are the areas I ask the Minister to address as part of the consultation process.

Dr. McDaid: I assure the Deputy those issues will be addressed. We are aware of the intense growth in tourism in Dublin city and we welcome it. We have marketed this country as an island destination and have been very successful. We expect 5.9 million visitors to the island this year. It is my intention that figure should be equally divided between the regions and I introduced policies to do so. In my meetings with Bord Fáilte, it has been my priority to insist that the main policy should be for an equal spread throughout the regions. I believe in that policy.

The national development plan is already incorporated in our approaches to the EU. It is in keeping with EU thinking because it agrees that it wants to spread funding on a regional basis. It wants product development to be extended to the regions.

We have done exceptionally well since 1989. Since then everyone involved has worked exceptionally hard and we have an excellent product. As a result of EU investment, this island has become a quality destination. We will insist that continues. I agree more product investment should be directed to the regions. The other regions which are doing well, the south-west and the east coast, are experiencing congestion as a result of this success. That is detrimental to those regions and does not give a proper picture. If we can spread this around, everyone will benefit.

The talks are ongoing at various levels. My Department is in discussions with the Department of Finance. I will insist, when putting our proposals to the Department of Finance for the national development plan, that tourism is very important to this State. It is worth £2.5 billion to the economy. In 2005-06, it is estimated that it will be worth £4.5 billion. We must protect that. Any industry worth so much is worth looking after. There is huge competition. Today there are elections in Scotland and Wales. When countries start to devolve, they start to think about competitiveness.

International Carding Scheme.

3. Mr. Allen asked the Minister for Tourism, Sport and Recreation if his attention has been drawn to the fact that the new arrangements under his Department's carding scheme may result in some athletes incurring a tax liability; and if he will make a statement on the matter. [11719/99]

Dr. McDaid: I introduced the international carding scheme in 1998 to provide a range of supports, both financial and non-financial, to assist Ireland's most talented players and athletes realise their potential to perform successfully at the highest international levels.

Arising from experience of the first year of operation, I made a number of improvements and modifications to the 1999 scheme. One such improvement is that players or athletes who have reached international or world class standard in their sport may now opt to have up to half the maximum grant applicable to their category applied to their general living expenses, instead of towards meeting costs directly arising from the pursuit of training and competition programmes. This change was made to facilitate athletes undertaking the gruelling levels of training required to reach world and Olympic finals to participate in full time training.

The question of whether a tax liability arises in respect of any payment made under the international carding scheme is, of course, a matter between an individual athlete and the Revenue Commissioners. The Department of Finance has advised that, in general, payments made to athletes which are directly associated with training requirements are not regarded as income for tax purposes, but it is the responsibility of the player or athlete to satisfy the Revenue Commissioners regarding the nature of such expenses. However, the Department of Finance has also indicated that any part of a grant payment which is applied to ordinary living expenses would be treated as taxable income. This information was conveyed to athletes in the outline of the 1999 carding scheme.

It would, of course, be the responsibility of the player or athlete to declare the amount for income tax purposes and it would be a matter for the Revenue Commissioners to determine if there is a liability to income tax.

Grant payments made under the international carding scheme are subject to tax clearance procedures in the same way as any other grant-subsidy schemes operated by the State.

Mr. Allen: It is regrettable that the modification to the card system which the Minister made will result in some athletes being liable for tax. Has the Minister considered asking the Department of Finance to classify grants to athletes under the carding system as exempt from taxation? Has he considered discussing with the Department of Finance an offer of tax free status to those athletes who are not earning a great deal, unlike the top athletes involved in international competitions? Has he considered discussing with the Department of Finance the possibility of offering tax free status to those athletes who are not earning the huge amounts of money earned by the top athletes who compete in international competitions throughout the world? It is regrettable that we do not have a tax free status for the grants now being offered to athletes. Will the Minister consider entering into discussions with the Department of Finance so as to offer these grants on a tax free basis?

Dr. McDaid: It is difficult to get everything right at once.

Mr. Allen: We should try.

Dr. McDaid: I appreciate the Deputy bringing this matter to my attention because until I read this question I was unaware of it. Unfortunately, this is the result of different Finance Bills introduced over the years. The Deputy is aware that up to £24,000 is available to athletes on a graded basis but they have told me that expenses for training purposes and so on have to be vouched, so this year I tried to be flexible. They also told me that much of that money was spent on ordinary living expenses so when I introduced it I asked my Department to make it as flexible as possible. Unfortunately, I then found out about this issue although I am sure the Department of Finance is only applying it on the basis of the Finance Acts brought forward by various Governments. I will try to obtain more information on this particular aspect. I do not want the athletes to experience any undue harassment because of this matter. I thank the Deputy for bringing it to my attention. Perhaps my Department was aware of it; I certainly was not and I was trying to be as flexible as possible.

For the information of the House, should a player athlete decide to avail of the option, the maximum grant that may be awarded in respect of general living expenses in each of the categories is as follows: a world class one athlete can avail of up to £12,000 living expenses; a world class two athlete can avail of up to £9,000; a world class three athlete can avail of up to £7,500; and the international athlete can use £4,500 towards his living expenses. If the Deputy wants to raise this matter with me at a later stage I will be happy to do so.

Mr. Allen: I welcome the Minister's positive response. I raise the query as a result of an approach made to me by a prominent athlete who had substantial concerns about the implications of the tax position. Will the Minister take into consideration that some of our athletes exist on social welfare and a grant they receive from the Minister's Department? Income from all sources is liable for taxation. Will the Minister consider preparing a memorandum for the Minister for Finance on the question of offering these grants on a tax free basis. Surely we owe that to our prominent athletes and potential world champions. To extend the question slightly-----

An Ceann Comhairle: We must now proceed to Question No. 5. The six minutes have expired. I call Question No. 5.

Mr. Allen: My question and my supplementaries were short.

An Ceann Comhairle: Unfortunately, the Chair has to implement the rules laid down by the House.

Mr. Allen: The Minister is flexible. I will be brief.

An Ceann Comhairle: The Chair has no discretion to change the rules. Question No. 5.

Mr. Allen: I will not argue that one.

Dr. McDaid: Perhaps we could consider the matter in the next Finance Bill.

Mr. Allen: I ask that our athletes contributions be exempt from taxation.

Tourism Employment.

5. Mr. Perry asked the Minister for Tourism, Sport and Recreation the steps, if any, he is taking to ensure that the expanding tourism sector will be able to meet its labour demands within the parameters of Partnership 2000 in view of a company's decision (details supplied) to cut back on investing in Ireland due to labour shortages. [11788/99]

Dr. McDaid: The tourism industry has been experiencing an increasing problem with labour and skills shortages in recent years but these difficulties are not unique to the sector. Due to Ireland's recent favourable economic performance and changing demographic structure, labour shortages are affecting many sectors in the economy, including retailing, building and construction and software.

In response to these difficulties, both the tourism industry representative bodies and CERT continue to work individually and in partnership to promote careers in tourism in a very competitive environment.

In November 1998 CERT launched the first National Tourism Careers Roadshow as part of its recruitment drive. The roadshow toured nationwide and was supported by a major media and advertising campaign. It featured career days in 35 prime venues and was backed by similar events in CERT's centres which together attracted more than 10,000 student visitors. A databank of more than 8,000 people seeking further contact and summer jobs in the industry has been compiled.

A "Careers in Tourism Magazine", sponsored by CERT, the Irish Hotels Federation and the Restaurants Association of Ireland, was produced and given to every student who attended any of the career promotion events. A 16 page careers supplement was also produced in a national newspaper and 5,000 copies of the supplement were distributed at career events throughout 1998.

Workshops for career guidance counsellors took place in Kilkenny, Carlow and Kerry, 60 school exhibitions were attended by CERT and 283 career talks were given to 10,000 students. These talks were targeted at those schools that did not attend the careers roadshows.

A tourism recruitment promotion with 2FM radio took place in January and February this year involving participation in street entertainment and radio slots over a three week period.

The Telephone Careers Information Line on Freefone 1800 produced over 3,000 inquiries on tourism careers. Careers information was circulated to more than 1,400 schools, FÁS offices, libraries and youth organisations. Information packs were made available to all industry personnel giving career talks. These packs include career brochures and course information, a careers video and overhead slides.

Notwithstanding the competitive labour environment, CERT maintained 1998 recruitment levels at close to the previous year's levels with the assistance of a range of interventions, including those I have already outlined. I understand from CERT that it anticipates a broadly similar outturn in 1999.

On many occasions since taking up office, I have urged the industry to become more proactive in addressing recruitment difficulties and labour shortages and to take appropriate steps to counter the perceived poor image of tourism as a career opportunity. In this context I particularly welcome the Irish Hotels Federation's quality employer programme which is based on best practice in all aspects of employment including recruitment, induction training, ongoing performance assessment, career progression and conditions of pay and employment. In the two years since the programme was introduced, approximately 60 per cent of members of the federation have applied for accreditation and 220 establishments have been accredited so far. The Restaurants Association of Ireland's restaurant and customer charter is another good example of the type of initiative needed.

As the labour market is expected to tighten, with unemployment levels declining further over the coming years, greater emphasis may well have to be placed on other potential sources of labour for the tourism sector, including married women returning to work, retired people, those wishing to work part time and non-national labour. The key challenge facing the industry and CERT is how to put in place appropriate policies, programmes and arrangements to attract, motivate and retain a skilled labour force in the face of declining labour availability and increasing competition from other sectors. For the industry this will also involve considering internal training requirements and measures which could improve labour productivity. In the context of preparations for the new National Development Plan, my Department is working closely with CERT to identify the most appropriate focus for its activities in the future and specific measures which should be undertaken by it to help address the training requirements of the industry in an increasingly competitive labour market.

Mr. Perry: Will the Minister agree that the human resource base is important to the successful development of tourism? There are 156 Bord Fáilte approved units of accommodation in Sligo, with all its attractions, and 58 in Leitrim. A leading company has declined to invest further in the tourism industry because, despite what the Minister said in his reply, it cannot recruit staff. Is there a policy for retraining staff and to encourage people into the tourism industry? Large numbers of tourists are coming to this country and the industry will be badly served if we do not have qualified trained personnel on the ground. What provision has been made for investment in human resources, particularly in the western and Border counties? Companies are declining to expand because they cannot recruit staff, despite all the announcements the Minister has made.

Dr. McDaid: There is enormous potential in the tourism area but the problem is that many people are using it as a type of one-stop-shop before they take up a different career. That has come about as a result of the industry's bad image. I have raised this matter with those in the industry and they have responded positively by introducing quality approved programmes and the restaurants have also come on board. We are trying to get away from the image that the service industry is not what it once was. Irish people will never again be servile. We are trying to get away from that mentality. There is enormous potential in the industry and jobs in tourism in the future will pay well, particularly with the introduction of the minimum wage, but it is difficult to indoctrinate that in people.

Mr. Perry: Has the Minister plans to further promote the culture of enterprise and business in schools? There is a misunderstanding on the part of teachers with regard to encouraging students to go into business and the service industry. The Minister is correct that there is a misunderstanding of the role of serving the customer but he could do a great deal to further indoctrinate the enormous potential of the industry. I appeal to him to promote the tourism industry in the forthcoming school term. We must develop tourism in Sligo, Leitrim and the Border counties. If we do not succeed in encouraging people to work in hotels and restaurants, the industry will not grow.

Dr. McDaid: I agree and that is what we did this year. CERT embarked on a roadshow and visited 38 schools. We targeted schools it was unable to get to and it visited schools to promote careers in tourism. We targeted 10,000 students and I hope that will continue next year. One does not see the effects of a measure for two or three years. I agree that there is a shortage of labour in tourism, as in all sectors. We will have to look towards the future.