Thursday, 29 September 2011
Dáil Éireann Debate
7. Deputy Michael McGrath asked the Minister for Transport, Tourism and Sport if he is continuing to meet with the airlines in relation to the abolition of the air travel tax; his plans in the event that he fails to reach any agreement on additional passenger numbers or new routes; and if he will make a statement on the matter. [26604/11]
Deputy Leo Varadkar: The Minister for Finance announced the proposed suspension of the €3 travel tax as part of a three-pronged strategy aimed at increasing inbound tourism in the jobs initiative in May. This strategy involved not only the proposed suspension of the travel tax, but also the introduction of a new growth incentive scheme by the Dublin Airport Authority, DAA, and more targeted and co-operative marketing of new routes from key source tourism markets by Tourism Ireland, the DAA and airlines to encourage more tourists to fly into Ireland.
The Government made it clear from the outset that the travel tax would only be suspended if the airlines responded positively to these initiatives in terms of restoring routes and capacity. My officials and I held a number of meetings with the main airlines, Ryanair and Aer Lingus, to establish what new services they might introduce or reinstate to take advantage of the incentives on offer from the Government and DAA but their response was disappointing and the Government decided to retain the travel tax pending a further review next spring. I also wrote to more than 20 other airlines currently servicing the Irish market or who may be interested in entering the Irish market informing them of the initiative.
I am not currently in active discussions with the airlines on this initiative but I have undertaken to re-examine it if they are prepared to introduce additional routes and capacity for summer 2012 and the airlines know that I remain open to discussions with them on this basis.
In the meantime, I have the agreement of the Ministers for Finance and Public Expenditure and Reform that a significant proportion of the revenue generated from the retention of the tax will be made available for a targeted co-operative marketing effort. Tourism Ireland is finalising plans in this regard at present in conjunction with the airlines, airports, ferry companies, tour operators and others.
Deputy Robert Troy: I thank the Minister. It is disappointing that the airlines have not taken on board what the Government wanted. It is not good news. However, it is welcome that the €3 charge is being put into a specific fund. The Minister of State, Deputy Ring, alluded to it previously when I was in the Chamber.
The Minister referred to a significant percentage. Perhaps he would state what percentage of the fund will be invested in tourism. Is it intended for a specific area of tourism such as marketing or can people seek capital funding? How long will the scheme last? The Minister referred to going back to the airlines again next year. If they do what he requests, will the €3 tax be abolished and the fund come to an end? Perhaps the Minister would elaborate a little more on what the money will be spent on and specifically how much?
Deputy Leo Varadkar: I will elaborate as much as I can but nothing is finalised yet. It is not that I am holding back information but that matters have not been fully decided yet. The new Government found itself in the same boat as the previous one in the sense that the previous Government reduced the tax from €10 to €3, the airlines having complained bitterly about it, but it got nothing back from the airlines for it. We offered to reduce the tax from €3 to zero but we got very little back from them for it either. As we are not abolishing it between now and——
Deputy Leo Varadkar: The approximate amount of money we will take in because we have not abolished the tax between now and the end of the year is €9 million. Half of that is being made available to Tourism Ireland for co-operative marketing and other initiatives with airlines, ferry companies, tour operators and others. Essentially, a call went out to those bodies to come in with their tourism and marketing plans. Obviously they have to contribute to them. It is not free money for an airline; it must cough up some money of its own as well. The €4 million or so will leverage more when one includes what will come from the airlines and tour operators. The key issue is companies must come back with a marketing plan, proposals and promotions that we consider will be of benefit and will increase tourism. Tourism Ireland is finalising those now with a view to agreeing some but not all within the next week or so. I will make an announcement in the House once I have the information and the agreements are signed. Who knows what will happen next year. Nothing has yet been decided for next year.
Deputy Robert Troy: I wish to ask a brief supplementary question. It relates to an issue I raised when I spoke on the tourism Bill last week. Perhaps the Minister would consider ensuring that each county has a tourism officer. The tourism officer has been lost to Westmeath in recent weeks. I do not mean to be parochial but it is important for each individual county to have someone designated specifically to market the tourism attractions in the area, or perhaps there could even be a regional officer. It is worth considering using the fund for that purpose.
Deputy Leo Varadkar: I would rather not do that because it is just a one-off fund. It will not be there forever so one might be able to hire someone for three or four months and then they would be gone. I do not know what the benefits from that would be.
I welcome the fact that local authorities take an interest in tourism. I particularly welcome the fact that local communities and chambers of commerce take an interest in tourism and promoting their own towns and villages but there are too many players in the tourism market and I would prefer that local authorities, by and large, would concentrate on keeping towns and villages clean rather than trying to duplicate the work of Fáilte Ireland and the existing bodies.
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