Shane Ross (Dublin South, Independent) | Oireachtas source

I congratulate Deputy Ruth Coppinger on her maiden speech and I wish her many long years in this House. I regret the fact that she is supplanting her constituency colleague, but maybe we will find another constituency for him. In light of what he said in his elegant speech in Irish, it would be a great pity if we were to lose him to a colleague for political and constituency reasons.

I listened to what Deputy Joe Higgins had to say and it consistently alarms me that I find myself, once again, more in agreement with him than with those who promote this Bill. That is not because I agree with the specifics that all the money should go into housing, which is a very direct message and somewhat restrictive, but because I am deeply suspicious of the motivation behind the Bill and I am extremely reluctant to believe the money is going to be as productive or as impartially and independently distributed as the Government parties lead us to believe.

Once upon a time, over ten years ago, Charlie McCreevy had a bright idea. The nation was booming and, partly to be prudent for the future into 2025, his idea was to set aside money for a national pension fund. It amounted to 1% of GDP. It was prudent because it was going to dampen a boom that was getting artificially large. Charlie McCreevy had many faults and flaws but he knew that, if he set the money aside in large sums, politicians - himself and his party included - would see the fund growing, set their eagle eyes on it and try to get their paws on it for political advantage. Instead of just setting up a fund, as most politicians would do, he set it in legislation that the fund could not be pillaged for political reasons and could not be used for politicians' constituencies or pet projects. He seemed to have set up, not for eternity but for over 20 years, a fund to look after the needs of pensioners from 2025. That was a sound idea with which few people disagreed at the time. He did not take in the capacity of his successors, when faced with the first possible emergency, huge political embarrassment and a national crisis, to destroy the idea.

As Deputy Peter Mathews spelled out so clearly, when the bank crisis arrived the fund was completely and utterly destroyed. Legislation was passed in the Oireachtas to allow the Government to use the fund to prop up the banks. The fund is down €7 billion or €8 billion, a figure that fluctuates a bit, varying with the price of Bank of Ireland shares, which are volatile at the moment. The fund is all but gone, with only €6.9 billion remaining.

Today, we are debating what happens to the entrails of the fund. The legislation does exactly the opposite of what Mr. McCreevy did. It enables the Government to do exactly what it likes with what is left, masked with a few pretty cosmetic restrictions. I do not like the legislation, although it has been well spun and well sold and is coated in the language of apple pie and ice cream. The fund will be used, ultimately or pretty shortly, for political purposes and nothing in the legislation stops it from being used for that purpose.

My first problem is the question of why the NTMA. The NTMA is the universally acceptable face of Irish State capitalism. It has supposedly done a fantastic job and has managed to capture most Ministers for Finance, almost all of whom sing its praises. I am not sure the myth stands up to scrutiny. Most of it comes from the NTMA and its extraordinarily well-paid spinners, some of whom are sitting for hours before the Committee of Public Accounts, from where I have come, spinning some smooth and unconvincing stories about NAMA. They have done a very good job for the NTMA and have done such a good job that the NTMA empire has expanded over the years from being a debt management agency into taking control of the State Claims Agency, the National Pensions Reserve Fund, NewERA, the NDFA, NAMA and various other bodies, according to a briefing I received from the Department of Finance.

I wonder why the NTMA has been given this all-powerful, monopolistic role in the Irish economy and why Ministers are so consistently happy to pay tribute to its success. It has had successes; there is no doubt about that. The fact that it has been able to sell Irish bonds is a success by its standards, whether by luck or not. It had success there and was good at marketing those bonds. However, anybody who believes the NTMA has been some sort of stellar performer in managing funds ought to look at some of the critical pieces written by Professor Stewart of TCD and others, who conclude that the fund management performance of the NTMA is at best middling in terms of its competitors overseas.

In its early days, the NTMA very cleverly chose a benchmark which is always exceeded. Every year, on 31 January, it comes out to an audience which is quite uncritical and not very knowledgeable, including successive Ministers for Finance. Each year, the Minister is present and nodding wisely while the NTMA says it has beaten the benchmark again, a benchmark it set itself. Therefore, let us not get too starry-eyed about what the NTMA does or let us not be too happy about the strategic investment fund going to the NTMA. Let us look at this more critically and let us not blindly say it will be okay because it is going there. The NTMA's performance is not particularly great. It is not top quartile, and this we should bear in mind.

What is going to happen to this money, this €6.9 billion? We do not know. However, we are being reassured that there are certain restrictions on its use. First, it will go to Ireland, and second, it will go into commercial projects. I do not believe these two restrictions are necessarily compatible. It will not necessarily go to the most commercial projects available if it is restricted to the home patch. This excludes so many options that it is not guaranteed to be commercial. Restricting it to Ireland may have merits; obviously the Irish economy needs that money, but that restriction certainly does not mean it will go into the optimal commercial investment.

The second restriction, which is blandly bandied around by those who support this Bill, is that the money must go into commercial projects. How in the name of God do they know the projects are commercial before they have started? What they mean is that the money will go into projects they judge to be commercial, a purely subjective judgment. When we leave decisions like this to subjectivity, we leave them open to the possibility of political interference. With the best will in the world, politicians could maintain that the projects involved are commercial, but the danger is that there could be another agenda involved. I suggest the Government, with only 18 to 24 months to go, will succumb to that danger for political purposes.

The proof of this is that the Minister has refused to allow this fund out of his political grasp or the political stranglehold in which it is held. As I see it, the general government policy on where investments go is set by the NTMA, and the most specific direction of these investments is set by the new companies investment committee. The NTMA is dominated by Government nominees. It currently has an advisory committee which is nominated by the Government, and it will now have a nine-member board which will be nominated by the Government. However, with the Government's record, there is little doubt that it will put in place people who are, at the least, safe choices, people who when the chips are down will do what they are told.

I have just come from a meeting of the Committee of Public Accounts which had NAMA before it. I am not going to be unpleasant or personal about anything, but NAMA, which is part of the NTMA family, has just got a new director. This has happened under the radar and there do not seem to have been any announcements about it. This new director appointed to an important State agency happens to have a Fine Gael pedigree second to none. That new director is also on the board of Bord Gáis. This indicates to me that the Government will not be in any way shy when it comes to making appointments to the new board of the NTMA, particularly to the investment committee, and that it will appoint its cronies and people who will send the money in the direction the Government approves.

In fairness, the investment is not directly decided by the Government, but the Minister has a veto. Therefore, it comes to the same thing, although couched in language which offers a certain protection. What I see happening here is something that always happens where politicians, elections and large amounts of money come together. What I see happening is that money will be directed in a way that will be politically advantageous. I do not see any problem with giving the money to housing projects, nor do I see the Government having any problem with that. The problem I see is that the Government will probably give it to housing if it can, but only in specific places where it is politically advantageous to do so. That is the kind of cynical operation I see at hand here. If it were not the Government's intention to direct this money to its political advantage, why did it not detach it from the NTMA and from itself and give it to a truly independent body with a real commercial mandate and direction and which is free of political interference? It could not do that because at the back of its mind it wants this cash and wants to be able to put it in a place that is important to it. The history of Irish politics demonstrates that this is what always happens. Otherwise, there would be far stricter limits and far more restricted investments.

I am not happy about this so-called commercial mandate, or the suggestion that the money must go to commercial interests.

There are many quangos that are patronised and ripped off in order to pay directors' fees to Government friends and they are called commercial semi-state bodies. Some of them are not commercial at all. CIE is known as a commercial semi-state body. It is not commercial in the sense that it makes a profit; it never makes a profit. It is subsidised to the amount of about €280 million a year. Will we be able to take some of this money and shove it into a body that is not making money because it needs it and say it is meant to be a commercial body or could be in the future? If it goes to prop up a failing State body, that should be addressed in a completely different way. "Commercial" is an abused and contaminated word. There are real dangers. I have serious doubts about setting up another jobs agency, if that is what it is meant to be, because such agencies tend to be subject to political interference and control and are not subject to commercial criteria. While I do not want to say anything irresponsible, this bond is in serious danger of becoming a political slush fund. The proof of the pudding will be in the eating, but the wording of the Bill suggests I am right. It will have a political board controlled by the Minister for Finance and in approaching a general election it will be used in a way that is not responsible and frittered away.

There is a shameful history to the origins of this money and it is shameful that so little is left. Owing to the record of the Government and its predecessor with such moneys, I would be inclined to oppose the Bill.

See this speech in context