Dáil debates
Tuesday, 24 January 2012
Other Questions
Sale of State Assets
2:00 pm
Pádraig Mac Lochlainn (Donegal North East, Sinn Fein)
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Question 52: To ask the Minister for Public Expenditure and Reform if the Troika have imposed a financial target from the disposal of State assets. [3791/12]
Brendan Howlin (Wexford, Labour)
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The context of the Deputy's question is the Memorandum of Understanding, MOU, governing the EU-IMF Funding Programme for Ireland, which commits the Government to considering options for the ambitious programme of asset disposal, based on the programme for Government and the report of the review group on state assets and liabilities.
In our discussions, the troika emphasised that it views asset disposal as a structural reform measure intended to improve efficiency and competition in the economy, while offering the prospect of reducing overall debt levels. While it is anxious that the Government's programme of asset disposal should be ambitious, it has not imposed any particular target for proceeds from the sale of State assets on us.
It has signalled that it would be prepared to agree to the retention of a sizeable amount of proceeds from asset disposal for investment by Government in job creation initiatives as I have indicated previously.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I am glad the Government has clarified that any choices to privatise will be Government choices and are not being foisted upon it by the troika. The Minister said from the get-go that the sale of semi-State assets would refer to those that are non-strategic but he has failed consistently to offer a definition as to what differentiates a non-strategic from a strategic asset. We know he intends to sell off a stake in the ESB, and the speculation around the likes of Bord Gáis leads me to wonder whether the Government has given any meaningful consideration to or has any understanding of what are strategic assets for the State. Those assets, as the Minister is aware, are self-financing and return dividends consistently. The Minister states that the troika views an ambitious privatisation programme as a structural reform to improve efficiency but the decisions taken by his own Government fly in the face of that analysis. How does the Minister propose to deal with the issue of water infrastructure? He is dealing with it wrongly in my view in respect of charges but structurally he has opted for a commercial semi-State structure. He is doing that because he knows from past experience that approach works. ESB and Bord Gáis have delivered first class infrastructure. The Minister has never given any rational explanation as to how, from his viewpoint, the part privatisation of these assets gives us any kind of medium or long-term advantage. Also, the Minister used the term "a sizeable amount of proceeds". What is a sizeable amount of proceeds?
Brendan Howlin (Wexford, Labour)
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The Deputy has asked a number of questions and made a number of assertions again. She fundamentally misunderstands, maybe deliberately or maybe not, the Government intention in this regard. We negotiated the programme for Government against the backdrop, as I indicated to Deputy Wallace, of the incredible shortage of capital for investment in new jobs in this economy. We debated how we could have access to it, and the NewERA concept from Fine Gael was to look at what they did in the early years of the State. The originator of that idea came from the ICTU, at least that is what they told us when we met them in advance. That was their concept. It was to see how we could use resources by amalgamating the resources of the semi-State companies. The NewERA entity is a progression on that. I do not suggest that ICTU would support it but the idea would be to examine how we could hand over some of the current semi-State organisations and use the capital asset value derived from that to invest in the next generation of State jobs.
It is not a contradiction to seek resources, for example, to invest in the new Irish water company, Water Ireland because, we hope it will be the next Bord na Móna in terms of being a job creator to provide sustainable water, ensure communities can thrive and so on. Many good ideas will be presented when we have access to money. There will not be a fire sale.
The Deputy opposite in particular loves announcing the bad news such that we were not going to be able to reduce the interest on our borrowings or maintain the minimum wage and that we would not be able to do anything, but we have done all these things. When the time is right we will sell non-strategic assets and use the proceeds derived to grow the next generation of jobs. That is the ambition we have.
Michael Kitt (Galway East, Fianna Fail)
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Does Deputy McDonald want to ask another question?
Mary Lou McDonald (Dublin Central, Sinn Fein)
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The mind boggles - I do not know where to start.
Michael Kitt (Galway East, Fianna Fail)
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Very briefly, please, Deputy.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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I will boil it down to one issue. The Minister said that he will have permission to use "a sizeable amount of the proceeds". Those were his words. The troika was notably guarded when asked about that. What does a sizeable amount mean? Does it mean 50% or 80% of the proceeds, or does the Minister know the percentage?
Brendan Howlin (Wexford, Labour)
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In truth, we have not fixed on an actual percentage because it is a matter of ongoing discussions. We have not fixed on the full quantum nor on the percentage that can be used for job creation as that is a matter of ongoing discussions.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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How can the Minister be so sure that it will be sizeable?
Brendan Howlin (Wexford, Labour)
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We have agreed on the word "sizeable". That is what I have just indicated.
Mary Lou McDonald (Dublin Central, Sinn Fein)
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The troika did not utter the word "sizeable", just to be clear on that.
Brendan Howlin (Wexford, Labour)
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No, they did not, but in my discussions with the troika I proffered several words and that was a word we agreed we would use in relation to that.
Michael Kitt (Galway East, Fianna Fail)
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I call Deputy Wallace to ask a brief question.
Mick Wallace (Wexford, Independent)
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Will the Minister give a guarantee that under any Government of which he is a part Irish Water will not be sold?
Brendan Howlin (Wexford, Labour)
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In the programme for Government, in regard to which I was part of the negotiating team, we said we would protect strategic interests. I regard water as an absolute strategic interest. From the discussions that have taken place, neither party in government would regard water as anything but strategic.