Simon Coveney (Cork South Central, Fine Gael)

I move:

That Dáil Éireann:

— welcomes the publication of ambitious, radical and achievable proposals from the opposition for investment in key infrastructure needed for future economic growth and job creation, achieved through a new and restructured portfolio of State companies;

— recognises that the State faces an extremely difficult economic future and that immediate action is required to stabilise the national finances, restore competitiveness and to create new employment;

— recognises that Ireland requires urgent and unprecedented investment in new infrastructure in the areas of communications, energy, transport and water services to restore Irish competitiveness and to create a new economy that is capable of thriving in the 21st century;

— acknowledges that an economic stimulus package is needed not only to create immediate short-term jobs, but to lay the foundations for future sustainable employment; and

— recognises also the dire current financial position of the national Exchequer and the need for creative new ways to raise finance for the investment required to fund the substantial stimulus programme needed for economic development;

calls on the Government to:

— implement a multi-billion euro modern infrastructure stimulus package and building programme to drive investment in areas of critical national importance such as next generation broadband, renewable and bio-energy projects, electric grid construction, water treatment and supply and electric transport infrastructure;

— drive this investment through the creation of new and existing State companies;

— create a new State industrial holding company, the New Economy and Recovery Authority, NewERA, to co-ordinate, restructure and finance new and existing State companies in the best strategic interests of the Irish people in order to develop the most competitive economy in Europe;

— finance this investment programme through funding from the National Pensions Reserve Fund, borrowings from the European Investment Bank and a public bond, with a possibility of non-critical State assets being sold at a future date to replenish the National Pensions Reserve Fund;

— reduce current and future State borrowing by moving planned infrastructural investment expenditure away from direct Government expenditure and into State companies that will seek a commercial rate of return through competitive charges for the use of new infrastructure;

— implement this investment programme and create up to 100,000 construction, engineering, project management and planning and research jobs over the next four years in addition to creating the conditions for future employment and economic growth; and

— immediately open a real and constructive dialogue with the Opposition on how best to proceed with developing the Irish economy via investment in much needed new infrastructure.

Fine Gael is moving this motion in an attempt to be constructive and to invite the Government to debate the concepts behind our recently launched policy document, Rebuilding Ireland. We deliberately avoided the temptation to put down a motion to kick-start another Punch and Judy show in here with insults being traded across the House. This motion avoids taking the opportunity to kick the Government for its incompetence in managing the economy which, God knows, is not too difficult. Unfortunately, the Government's response is a disappointment to say the least; it is an insult to the efforts that we have shown to be constructive, and to the House generally.

The motion proposes an €18 billion stimulus package over a four-year period through restructuring and reforming existing State companies and creating new State companies. The Government's response is to clap itself on the back for what it has done in the past and for some of the things it plans to do in the future. The Government has yet again shown itself to be arrogant and totally unwilling to listen to Opposition suggestions, proposals and constructive criticism.

A few weeks ago the Taoiseach welcomed our policy document as a basis for discussion and debate. He went on to say he had some difficulties with elements of it, but that it would be appropriate to have a more detailed debate on the proposals, perhaps through Private Members' time. What a load of nonsense that is in light of the Government's response which, I understand, was drafted by the Department of Finance this evening.

The Government is in such a state of paralysis that it cannot even respond intelligently to a serious and constructive motion. The Labour Party may not agree with all that we are proposing, but it is engaging seriously in creating new structures to deliver investment in an economy that is starved of capital and investment. I welcome its amendment to our proposal, even though I do not agree with all of it. However, I agree with the Labour Party's assessment of our current infrastructural deficit and the negative impact on competitiveness, but the Government cannot bring itself to recognise even that much. It is no wonder that people have given up on the ability of certain Ministers to lead. Even people in the Minister of State's own party have done so.

Ireland needs a Government that is open to new thinking and a new approach to solving problems. I want to look briefly at the Government's response to our new thinking. It is summed up in the final section of the Government's amendment which states:

invites the Government to continue to invest as planned in those infrastructure priorities that will ensure economic recovery far better than other untested, un-costed and undeveloped proposals.

The whole purpose of a debate like this is to develop new proposals and listen to new ideas that have been costed and examined in detail. They have been launched and we stand over them, but they are dismissed by the Government in favour of putting the head down and keeping on as we are. These are the failed policies that result in the kind of economic reporting that we will get tomorrow in future predictions for the economy in the short and medium terms.

The Government congratulates itself on the planned €600 million investment by Eirgrid in a new east-west electricity interconnector. Many people would say, however, that it is €200 million more expensive than it should be. The Government also congratulates itself on a memorandum of understanding signed with Renault, Nissan and the ESB to provide electricity infrastructure in Ireland. We welcome these things, but they have nothing to do directly with the motion before the House.

Fine Gael is about reform because that is what Ireland needs. We have proposed reform in our health service through fair care proposals, and have also proposed reform in third level education by providing a funding mechanism so that people can avoid third level fees while in college. We have been proposing public sector reform for four years, as well as reform of the way this House does its work.

This evening's debate is about reforming the way in which publicly owned companies can deliver for the economy in times of recession. We are proposing doing that by amalgamating some companies, creating new ones in new areas and potentially getting rid of some that are no longer necessary. However, the Government will not even entertain that concept for debate, never mind for consideration. That is pathetic in the context of the challenges our country currently faces and the reform agenda that is required.

The emphasis of what Fine Gael is proposing is quite straightforward. In the Rebuilding Ireland document - or New Era document as it is now being called - we are concentrating on how to get investment into the economy at a time when the Government cannot borrow any more money. We are concentrating on key labour intensive areas that require investment, so we can start employing more people in new areas. Most importantly, however, we are concentrating on areas that will be the basis for a new economy, so that in three, four or five years time when Ireland starts to recover we will have rapid growth. We will also have the arteries upon which that rapid growth can feed through new technology and new infrastructure in areas such as telecommunications, energy, water and transport. Telecommunications infrastructure in Ireland will be just as important as the motorways we have built over the past ten years. We are examining new ways in which we can invest capital in these key arteries for development which can feed future growth in a way that will not increase Government debt or the borrowing requirement. We propose to do this through the establishment of new State companies and, more important, we propose that the process should be managed by an organisation entitled the New Economy and Recovery Authority. Essentially, it will be an industrial holding company which will manage and own State companies and through which we can invest money.

People have misread what the Fine Gael Party is trying to achieve in this document when they argue that off-government balance sheet borrowing is a sleight of hand or that there is no difference between increasing the debt to which the State is exposed through commercial State companies and borrowing and spending through agencies. There is a vast difference between these two funding models. Our proposal is not the same as investing money in energy, telecommunications or water infrastructure through local authorities or State agencies, which the State cannot afford to do, but involves the establishment of a commercial State-owned company to borrow money and raise capital on the basis of making a commercial return over time. The experience of infrastructural projects is that they attract private pension fund money. They are, therefore, a good investment for the National Pension Reserve Fund because they represent an investment in the future of the economy and by and large provide a commercial return on the basis of a regulated return. For this reason, they are not exposed to the potential difficulties of a market in recession.

In short, the Fine Gael Party proposes to establish a holding company, whether known as "NewERA" or another name, which will drive efficiencies and change in the State's portfolio of companies. For the first time in history, we will start to manage our State-owned companies as a portfolio of companies which can deliver on an overall strategic plan for the country rather than allowing them to develop little empires, as is currently the case. While the latter approach works for certain functions, it does not deliver in other areas.

I will give an example of what we propose. One of the areas on which we want to focus investment is telecommunications and broadband infrastructure. While Ireland has a considerable amount of State-owned backbone telecommunications infrastructure, it is not handled or managed in a strategic manner on behalf of the State. Iarnród Éireann, Bord Gáis and the ESB own such infrastructure and the State has spent more than €100 million on having fibre for metropolitan area networks put into the ground. All this infrastructure is managed in a disjointed fashion. A formerly State-owned company, Eircom, which is now in private hands, is dying on its feet because its parent company is broke and has gone into administration in Australia and New Zealand. The company is now up for sale and is in danger of being purchased by a new set of venture capitalists seeking to make another quick buck by turning it over and selling it in a few years, thus making a personal fortune on the back of raising more and more debt for the company. In the meantime, Ireland will not get the capital investment in broadband infrastructure which it needs.

We must establish a State-owned company which can purchase back, on behalf of the State, the infrastructure owned by Eircom. It must manage this infrastructure and all other State-owned broadband assets we have in the ground in a strategic fashion so that we can provide a web of broadband backbone infrastructure based on fibre that will provide wholesale infrastructure on which the private sector can operate and offer businesses and households an attractive and competitive commercial retail product. In doing this, we could employ tens of thousands of people. Instead, however, the Government continues with its approach towards broadband which is failing to deliver next generation infrastructure.

I have offered only one example but one can make a similar case for change in Government policy in the energy infrastructure area in which we need to facilitate energy storage and micro-generation on farms, small businesses and households so that they can sell energy back to the grid and make money in the process. We need to take a similar approach to transport infrastructure by linking electricity generation and infrastructure with our requirement to fuel transport in the future so that we no longer spend €3 billion per annum importing fuel for cars, trucks and tractors. This is the kind of new thinking Fine Gael is proposing.

We also propose establishing a new State-owned company to manage our water infrastructure rather than have 37 local authorities managing bits and pieces of pipeline all over the country. We know some areas will suffer drought and others will suffer flooding. We also know major construction projects will be required to transport water from the west and midlands to Dublin. Despite this, we persist in managing our water infrastructure in a disjointed manner.

Let us see some new thinking and an acceptance that new ideas and different thinking are emerging from the Opposition benches. The Government must give these ideas the respect they deserve by responding in an intelligent manner as opposed to dismissing them in the way the Minister has done.

See this speech in context