Michael McGrath (Cork South Central, Fianna Fail)
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Question 1: To ask the Minister for Finance the priority issues he intends to raise with the EU, ECB and IMF during their forthcoming mission review visit here with particular regard to the possible renegotiation of elements of the memorandum of understanding. [27800/11]

Michael Noonan (Limerick City, Fine Gael)
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The fourth quarterly review of the EU-IMF programme of financial support for Ireland takes place from 11 to 21 October. The review will comprise a series of meetings to evaluate all the elements of the programme covering fiscal developments, including the comprehensive spending review and potential asset disposal, the macroeconomic outlook and progress on commitments in restructuring the financial sector and structural reform. It is clear that for the review the primary focus will be on our performance against the targets due to be met by the end of the third quarter of 2011 and assessing progress on targets due to be met in coming quarters. I have already signalled that notwithstanding the substantial consolidation already carried out - in particular, the amount being delivered this year - difficult decisions in respect of future consolidation remain. There is no doubt that the budget for 2012 will be another difficult one. Under the terms of the EU-IMF programme memorandum of understanding, an adjustment of at least €3.6 billion is to be implemented next year. However, as I have signalled, consolidation above this amount may be required if we are to adhere to the general Government deficit target set for 2012. That will become clearer in the coming weeks in the light of the continuing assessment of the most up-to-date information available.

The Government has repeatedly stated its commitment to the programme targets. Meeting these conditions on time and target is the best way to ensure we emerge successfully from the programme. That will mean that we can return safely to the financial markets for funding in as timely a manner as possible. This is one of the principal objectives of the programme. The Government's commitment to the programme does not stop us from seeking and agreeing changes to certain aspects of it. We have already done this successfully. The Government will continue to do so at the appropriate time.

Michael McGrath (Cork South Central, Fianna Fail)
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I thank the Minister for his reply in respect of next week's visit to Ireland by representatives from the troika. There are two issues I wish to raise, the first of which relates to how the proceeds from the sale of State assets will be used. As the Minister is aware, the Government negotiated a memorandum of understanding last April which stipulates that the proceeds from the sale of such assets would be used to pay down debt. That matter was not dealt with in the original memorandum of understanding agreed last December. The Government negotiated the provision to which I refer, but it has now departed from it and appears to be of the view that some or all of the proceeds should be used to fund job creation initiatives. Is the Minister in a position to indicate whether that matter is high on the Government's agenda for next week's meeting?

The second issue about which I am concerned involves the commitments relating to income tax and social welfare into which the Government has entered. The Taoiseach recently seemed to indicate a change of position in this regard when he stated this was a matter for negotiation between the Government and the troika on foot of the contents of the memorandum of understanding. That is disingenuous because the memorandum clearly states that, in effect, it is the responsibility of the Government to draw up a package of measures that will be fiscally neutral and allow it to reach the €3.6 billion target. Does the Minister intend to raise this issue at next week's meeting?

Michael Noonan (Limerick City, Fine Gael)
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The agreement negotiated by our predecessors in office envisaged an ambitious programme for the disposal of State assets.

Michael McGrath (Cork South Central, Fianna Fail)
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That is not true.

Michael Noonan (Limerick City, Fine Gael)
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However, an amount was not nominated in this regard.

Michael McGrath (Cork South Central, Fianna Fail)
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We did not sign up to any ambitious programme.

Michael Noonan (Limerick City, Fine Gael)
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In the programme for Government we indicated that a sum of €2 billion was to be achieved from the sale of State assets. The troika's view is that the proceeds of such sales should be used principally for debt reduction, while it is our view that a high proportion should be used for job creation and capital projects. The matter will have to be negotiated when the representatives of the troika come to town.

I require advice from the Leas-Cheann Comhairle on the Deputy's second supplementary question in view of the fact that a subsequent question on the Order Paper, in the name of another Member, relates to the same matter.

Michael McGrath (Cork South Central, Fianna Fail)
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The issue about which I inquired is relevant to Question No. 1.

Michael Noonan (Limerick City, Fine Gael)
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Should I provide an answer now or wait until the subsequent question is reached? I do not want to offend any other Deputy.

Michael Kitt (Galway East, Fianna Fail)
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What was the nature of Deputy Michael McGrath's second supplementary question?

Michael McGrath (Cork South Central, Fianna Fail)
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It relates to the Government's commitments on income tax and social welfare. The memorandum of understanding clearly states the Government may come up with alternatives which would raise the same amount of money as any proposed tax increases or payment cuts. Is that matter a priority for the Government in the context of the agenda for next week's meeting? This supplementary question is directly relevant to Question No. 1.

Michael Kitt (Galway East, Fianna Fail)
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I am informed that there is no obstacle to the Minister dealing with the matter.

Michael Noonan (Limerick City, Fine Gael)
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In that event, the Administration's position, as reiterated by the Taoiseach, is as set out in the programme for Government. In his recent remarks the Taoiseach merely pointed out that income tax increases amounting to approximately €250 million per year had been pencilled in for 2012 and 2013 and that we would be obliged to obtain the agreement of the troika to remove these commitments from the tax profile and replace them with other taxation measures of equal value. We do not see any difficulty in renegotiating that part of the programme. The Taoiseach wanted to be absolutely and factually correct when he stated that, as matters stood, that which our predecessors had negotiated included income tax increases. As stated in the programme for Government, we do not intend to have such increases in the forthcoming budget. However, there remains an element of negotiation with the troika on the matter.

Michael McGrath (Cork South Central, Fianna Fail)
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Let us be clear on the sale of State assets, the original agreement reached last December committed the then Government to reviewing the McCarthy report with a view to setting targets for the possible privatisation of State-owned assets. In April this was upgraded when the Government committed to the phased privatisation of certain enterprises. In July the position was upgraded further when the Government signed up to an ambitious programme of asset disposals. As the Minister has admitted, the amount of €2 billion is the Government's figure, not one put forward by the troika. In recent months a number of Ministers have stated we have no choice in the matter and that the troika is forcing us to sell State assets in order to raise €2 billion or €5 billion. That is not the case. That is not the agreement to which we signed up.

Michael Noonan (Limerick City, Fine Gael)
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The McCarthy report had been drafted but not published when our predecessors negotiated the programme with the troika and when the memorandum of understanding was put in place. It was clear that both sides were aware what the McCarthy report would contain, even though it had not been published. It was also clear what the intent was at that stage.

Michael McGrath (Cork South Central, Fianna Fail)
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There was no commitment made in it.

Michael Noonan (Limerick City, Fine Gael)
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We are not resiling from any matter. No figure was included in the original memorandum of understanding. We included a figure of €2 billion in the programme for Government and intend to realise that sum. However, we are obliged to negotiate with the troika on what we may do with the proceeds of the sale of State assets.

Michael McGrath (Cork South Central, Fianna Fail)
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The Minister should stop blaming us for his being obliged to raise that amount.

Michael Noonan (Limerick City, Fine Gael)
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I do not believe there is an issue of blame. I am in favour of and welcome the sale of State assets. There is no blame attached.

Michael McGrath (Cork South Central, Fianna Fail)
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In that event, the Minister should inform his colleagues to stop blaming the troika.