I am pleased to have the opportunity to appear before this Dail Select Committee, in my capacity as Minister for Enterprise, Trade and Employment, to assist in your examination of my Department's Estimate for 1999.

The Estimate for my Department for 1999 is £863.845 million which represents an increase of £97.091 million over the outturn for 1998.

As members of the Committee will be aware, a Supplementary Estimate for my Department, passed by the Dail on 31 March 1999, provides a further £3.848m approved by the Government specifically for the establishment of a North/South Trade & Business Development Body. The new Body is a key element in giving full effect to the provisions of the Good Friday Agreement.

The 1999 Estimate for my Department will underpin initiatives and actions aimed at building on the unprecedented and sustained economic growth we have achieved in recent years. A major focus for 1999 will be the implementation of the National Employment Action plan.

Since September last, all unemployed persons under the age of 25, as they cross six months of unemployment, are being referred by the Department of Social, Community and Family Affairs for FAS supports. This preventative strategy has since been extended to other groups and the results of our efforts are bearing fruit.. The Live Register is now below 200,000 for the first time in over 15 years. The unemployment rate - 6.7% is at its lowest in two decades, and well below the European average

I have also ordered a major concentration on targeting unemployed persons in two areas - Ballyfermot, Dublin and Kilkenny. This will commence in June and I expect that this concentration will lead to further reductions in the Live Register.

Employment Services Additional funding has been provided to FAS, both to increase its personnel resource as well as its operating systems. Likewise the Local Employment Service is being expanded to a further seven areas this year which will bring to 25 the number of areas throughout the country in which it is operational.

I have, however, been concerned that we are not getting the best value from the considerable resources - amounting to around £25m in this current year - which we are investing in our Employment Services. We need to achieve better co-ordination and balance between the two strands of the service, In this connection, the Government recently approved proposals to put new operational arrangements in place for the management, development and operation of the Employment Services.

I intend to bring proposals to Government on a new dedicated Social Economy Programme which is being initiated this year. The aim of this initiative is to support the development and regeneration of disadvantaged communities. The introduction of this programme has been greatly helped by the Social Partners on foot of an agreement in the context of P2000.

Indigenous Industry

In 1998 total employment in Enterprise Ireland client companies was estimated at 144,000. A total of 12,500 new jobs were created during the year. 1998 saw a 10% increase in sales for EI client companies estimated at £18.9 billion. Exports were up 12% over the previous year to an estimated £8.1 billion.

Shannon Development

During 1998, 3,475 new jobs were approved by Shannon Development for new and expanding industrial projects throughout the region. The full impact of these approvals will be felt over the next three years.

The Company took equity investments amounting to IR£1.7 million in 12 companies during the year.

During 1998, Shannon Development spent over £11 million throughout the region on developing the economic infrastructure.

In relation to its property holdings, Shannon Development is focusing on consolidating its existing landbank in key locations to facilitate further investment.

The County Enterprise Boards In the period since their establishment in October l993 to the end of 1998, Enterprise Boards have assisted the creation of over 15,500 jobs in the manufacturing, service or tourism sectors at a total cost of about £60 million. This approximates to an average grant cost per job of less than £4,000.

Inward Investment The buoyancy in the creation of new jobs by IDA Ireland companies, which has been evident over the previous four years, has continued through 1998. A total of 15,996 new jobs were created during the year. This is the highest ever job-creation outcome in one year and means that overseas companies have more than doubled their annual rate of job creation in the last ten years. Despite 7,186 job losses during 1998, the net employment impact was an increase of 8,810.

A total of 128 investment projects were agreed in 1998 with a job potential in excess of 27,000 over the next three to five years. Of these 66 were new greenfield projects, while the remaining 62 projects are expansions of existing overseas companies in Ireland. Nearly 70% of all jobs approved were for locations outside County Dublin. In addition, 115 projects were secured for Dublin's International Financial Services Centre.

Preliminary indications are that there will be continuous employment growth in 1999. To end of April 1999, 21 further new greenfield projects have been agreed by IDA Ireland. In the same period, 29 expansion projects have been secured from existing clients.

There are a number of US projects, both greenfield and expansion, in the pipeline with a job potential in excess of 4,000.

Science and Technology To ensure that we build on the present economic growth we must plan for our future by investing wisely and adequately in those technological niches that can best meet Ireland's socio-economic needs.

As the global economy becomes more "knowledge-based", the key to Ireland's continued success is to re-position Irish industry higher up the economic value chain. This is the new strategy of IDA Ireland and Enterprise Ireland. This approach is also endorsed by the ESRI and is in line with the EU Commission thinking.

It was with this background in mind that my Department asked the Irish Council for Science Technology and Innovation to undertake a Technology Foresight Study. The Council's report was launched on 30 April and among its key findings were that technology areas like Biotechnology and Information and Communications Technologies have significant potential to drive wealth and job-creation.

My Department, under my colleague Noel Treacy,T.D., is at present examining the Technology Foresight recommendations and is preparing proposals for appropriate implementation.

Trade Tom Kitt,T.D., Minister for Labour, Trade and Consumer Affairs, continues to pursue our national trade interests through the European Union, the World Trade Organisation, and bilaterally.

Minister Kitt will represent Ireland at the launch of a new round of world trade negotiations in Seattle in November.

Along with working towards reducing tariffs and barriers to trade, the New Round will look at developing and improving agreements designed to protect intellectual property rights, services, government contracting, and electronic commerce.

We hope to have an ambitious and comprehensive new round of trade negotiations, leading, within three years, to further significant reductions in trade barriers, and increased growth and prosperity world-wide.

Another major trade forum in which Ireland will be participating is the World Exposition, EXPO 2000, to be held in Hannover, from June to October, in the year 2000.

Industrial Relations The traditional indicators of the industrial relations climate are generally showing a significant improvement. For example, some 35,000 work days were lost last year due to industrial action, the second lowest figure on record.

Because we continue to need dispute settling machinery, and to a degree because of the complexity of the cases coming to the Labour Relations Commission, I am maintaining the level of funding that I decided last year, a significant increase over 1997.

Company Law Investigations During the twelve months ended December, 1998 there has been considerable activity in relation to Company Law investigations. In summary, 3 inquiries were ongoing at the beginning of the year, 3 inquiries were concluded during 1998, 10 were commenced in 1998 and 10 were in train at the year end. Amongst the latter were the appointment of section 8 inspectors to National Irish Bank Limited and National Irish Bank Financial Services Limited.

The Section 19 inquiries have arisen largely as a result of the questionable corporate practices, revealed in the Report of the McCracken Tribunal of Inquiry. Careful consideration will be given to the findings of these investigations, and I will be taking appropriate action to initiate prosecutions where warranted, and to bring evidence of any wrongdoing to the attention of the appropriate authorities.

Enforcement of Company Law In March 1999, together with my colleague the Minister for Science, Technology and Commerce, Mr Noel Treacy, TD, I announced the Government's decision to implement the recommendations of the Working Group on Company Law Compliance and Enforcement.

The Working Group produced a very comprehensive report. The Report illustrated the extent to which company law was not being complied with in Ireland and outlined the benefits that would come from the enforcement of and compliance with company law. In addition to making a number of detailed recommendations for changes in company law, the Working Group made two substantive recommendations -

1. the establishment of an Office of the Director of Corporate Enforcement which would have primary responsibility for the enforcement of company law, and
2. the establishment of a statutory Company Law Review Group with an ongoing programme of company law reform.The Government has agreed to provide the necessary staffing resources for both the Director and the ongoing reform of company law.
3. The legislation to give effect to these initiatives will be drafted as a matter of priority. I expect the Office of the Director of Corporate Enforcement to be up and running early next year. The additional staffing for company law reform will be put in place in the near future with the Company Law Review Group established initially on a non-statutory basis.

New Legislation Two important Bills have been published by the Government this year. The Companies (Amendment) (No. 2) Bill, 1999 was published on Monday 22 March, 1999 and the Companies (Amendment) (No. 3) Bill was published on 30 April, 1999. These two bills include important new company law including in the area of examinership and in regard to Irish Registered Non-Resident Companies (IRNRs). There are also changes to provide for the exemption of certain small companies from the need to have their accounts audited each year.

Prosecutions I have also taken a more proactive approach in ensuring compliance with the Companies Acts. This year I have successfully pursued prosecutions under Section 131 of the 1963 Act for failure to comply with a Ministerial direction to hold an Annual General Meeting. Currently Prosecutions are in train in other areas.

Companies Registration Office. The traditional compliance rate of Irish companies in filing statutory annual returns is extremely low. In fact during 1998 only approximately 13% of companies filed their annual return in time and only 35% approximately during the year in which it was due. This is an unacceptable situation and the CRO is putting in place a strict enforcement regime to ensure that either the returns are filed in a timely manner or non compliant companies are brought to book.

Approximately 30,000 companies have been struck off the register since the new regime was introduced in September last. In the meantime all other companies which are behind in making their current returns are being reminded to do so and if they do not file the returns are being prosecuted. The first 300 (approx.) such companies were successfully prosecuted in the Circuit Court on Tuesday 27th April and fines of between £50 and £150 were imposed on them for each offence.

I would expect that implementation of the recommendations of the Working Group on Company Law Compliance and Enforcement will greatly facilitate the Registrar of Companies in this regard.

May I conclude by again expressing my appreciation of this opportunity to elaborate on the Estimate for my Department for this year. I and my colleagues, Mr. Noel Treacy, T.D., Minister for Science, Technology and Commerce and Mr. Tom Kitt, T.D., Minister for Labour, Trade and Consumer Affairs will, of course, be happy to address any queries in relation to aspects of the Estimate which Members of the Committee may. wish to raise.