Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance) | Oireachtas source

Whatever we may think on this side of the House, the Government often pleads that it does not have the money it needs for the investment and stimulus programme we would like to see. With the credit union movement, we have an institution with money which wants to assist the State and its citizens in stimulating the economy by backing projects that would create jobs and pay social dividends. I understand the Minister of State's argument that the State has an obligation to ensure credit union members' funds are safe and sensibly invested but given that credit unions have to put their money in the banks, one might ask how safe are the banks. The credit unions are asking to be enabled to invest in State guaranteed schemes not just any old scheme.

The credit unions are offering money the State says it needs at low interest rates, as long as they are guaranteed a return. I do not know exactly what the credit unions have in mind in terms of how this would work. However, having chatted with them, I understand one example of the sort of thing they might consider would be a social housing project. There is general agreement in this House that we spend too much in moneys to private landlords in rent allowance. If we built local authority houses, that rental revenue would return to the State and would, therefore, be guaranteed. There would also be guaranteed savings in terms of the money paid out in rent allowance. This could be quantified roughly. If the credit unions lent €1 billion, the State could build 10,000 council houses and then receive extra revenue of approximately €120 million per year. The State could guarantee the repayment of the loan and the interest on it and we would have the extra social housing we need. That is the sort of scheme the credit unions and their members would like to back. The State could confidently offer a guarantee because it knows the revenue would be secure. There would be definite savings and a definite revenue return.

On the shared services, the Minister is saying that while not against the idea, the Government's concern is for the welfare of the credit unions and their funds and for whether they have the infrastructure to provide shared services without endangering the solvency and liquidity of individual credit unions. My understanding of what the ILCU suggests in this regard is that the Bill would state that they would be enabled to provide these services, but the Central Bank would put whatever conditions it wished in place to ensure the necessary infrastructure and safeguards were in place. Therefore, there would be conditions on the credit unions moving in this direction and these would be regulated and laid down by the Central Bank. What the credit unions want is the removal of any possible impediment to them moving in this direction. This is a laudable aspiration and is in the interest of credit union members and of offering choices to people in the financial services area. The Government should co-operate with the credit unions in facilitating this.

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