Brendan Howlin (Wexford, Labour)

No. It would collapse the economy. I realise there is an anarchic trend in some of the Deputies opposite which would welcome this, but let us tell the people the truth. The programme for Government includes a commitment to release value from the State's portfolio of assets, with the intention of using the proceeds to fund investment in the productive capacity of the economy. The programme specifies a target of up to €2 billion in asset sales, drawing from the recommendations of the review group on State assets and liabilities, the so-called McCarthy group. As the House is aware, the review group reported in April and I have been consulting my ministerial colleagues on its findings and other related matters since. The report stresses how economic recovery must be the central concern of economic policy, including, in particular, the generation of sufficient economic growth to expand employment as a key driver of economic sustainability. It points out that the realisation of proceeds from State assets can assist in the fiscal adjustment and the generation of capacity to invest in future job creation. However, the group cautions against a rushed sale process because this would inhibit the attainment of proper and fair value and, in many cases, it would not be prudent or even possible, given the requirement for revised regulatory procedures and complex legislation.

None of this will be done speedily. In this regard, I have stated an informed view must be taken of what is strategic and essential to the national interest. It can be argued that the ownership and control of electricity, gas and other utility transmission networks such as water are strategic. However, it cannot be argued that outright 100% State ownership must be retained in all cases. The policy choice is to determine which assets to sell and in what circumstances. Any decision on State assets must also have regard to the agreement we have made with our funding partners. The latest EU-IMF memorandum of understanding includes a commitment to asset disposal as an essential contribution to the adjustment process in which we are engaged.

The Government believes releasing value from State assets can provide funds for reinvestment in the economy, as well as reducing the State's debt burden. Funds released for reinvestment in this way also have the potential to help leverage further private sector investment to grow what the original State companies did and create the next generation of State jobs since there is no private money to leverage them now. In this way, the proceeds from the sale of State assets offer the potential to create new employment and to generate additional economic activity. This is the policy objective we are setting about. To this end, the Government has mandated the Minister for Finance and me to engage with our counterparts in the European Union, the European Commission, the ECB and the IMF during the forthcoming October mission to discuss a potential programme of asset disposals and, in particular, how those disposals should be applied as between retiring debt and funding productive investment in the economy to help stimulate jobs and growth.

We have already broken new ground in the last two tranches of negotiations with the EU-IMF-ECB troika to indicate that we want to break away from the commitment given by the previous Government that any sale of assets would be used to retire debt. We want to use it for job creation and growth. In order to progress these objectives, a group co-chaired by my Department and the Department of Communications, Energy and Natural Resources has been established to consider the best approach in achieving such a sale, including, as the Minister, Deputy Rabbitte, said, energy policy and regulatory, legal, financial and economic considerations. All of those will be carefully balanced before we come to a final conclusion.

The policy of releasing value from State assets for productive investment in the economy and for debt reduction is an appropriate response to the horrendous fiscal and economic challenges faced by the economy, the people and the Government which we inherited from our predecessors. It will contribute to bringing sustainability to the public finances and, most of all, to fostering economic growth and job creation. This is the task we have set about. Objectively, in the first six months of office we have come a long distance from teetering on the abyss of economic disaster to giving ourselves some space as we move away and give hope to people that there is an economic future for investment in this country.

On that basis, I cannot accept or support the motion tabled by the Deputies opposite. I strongly recommend the Government amendment to the House.

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