Professor Stephen Kinsella:

What is worth reflecting on is that the purpose of a sovereign wealth fund is to invest some principal from some source and derive interest from it. What the interest is used for is an entirely political decision. If we take Norway, Australia or Canada, or any of the major sovereign wealth funds, what they use the funds for is very interesting. In Norway, for example, approximately 20% of all current spending comes from the interest flow every year. There is a reinvestment process. It is fascinating to look at. We can easily see a situation where it is used for rail or other infrastructure.

This slightly complements my answer to Deputy Conway-Walsh. I would not have the funds investing directly in Irish Rail. I would not have it buying the equities of a private rail company. I definitely would not have us take the principal from the sovereign wealth fund and stick it straight into a rail company. All that would do is eat the seed corn. I would take the interest revenue, which would be pre-defined and would have a withdrawal process, and, if it is big enough and the political will of the day is there, invest some of it in rail or, perhaps, water. We do not tend to talk about water very much because it is not very sexy. Rail, road and water are long-term projects. A very good way to think about it is to ask how boring something is. The more boring it is, the more important it probably is. We talk about sewerage and water infrastructure all the time. Climate change means more flooding, which means more water, which means more drainage. This means the soil make-up changes. These all need to be managed. They can be managed in a very slow and boring engineering way, with no disrespect to engineers. This is a good thing. This is what I would use it for.

The great thing about this is that no one is taken from in this process. In any budgetary cycle, as we all know, a certain fiscal space is allocated to capital spending, current spending and elsewhere. What is interesting is how Australia or Norway use their pension reserve funds. They are used for these type of long-term infrastructural projects. I would see no problem with this whatsoever. It is fascinating to see that when this is managed in a transparent way and when the incentives are nicely aligned we get a very favourable outcome not only for the taxpayer but also for the infrastructure of the State.

I am sure Deputy Leddin saw when he was going around Norway the quality of the materials, roads, parks and swimming pools. I presume he was not looking at the sewerage infrastructure. The quality is there. I have been there. I was part of the Positive City ExChange project, which has twinned Limerick with Trondheim in Norway as what are referred to as European lighthouse cities. Very often we compare systems and the systems there are very well developed. The systems in Limerick are great but the systems in Norway are very well developed because they have had decades of infrastructural investment. They are able to do things because they have next-generation plugs and everything else. It is absolutely fascinating to see.