Paudie Coffey (Waterford, Fine Gael)
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Deputy McLellan is in possession and 28 minutes remain in the slot.

Sandra McLellan (Cork East, Sinn Fein)
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When setting out the 1986 legislation, Ministers of the day spoke of the need for public trust and confidence in the operation of a State lottery and they were absolutely correct in this assertion. The fact that An Post has held the national lottery licence over the past 25 years has in itself instilled trust in the lottery and an affinity with the brand. Understandably, there is concern about the new licence holder and a question as to whether the public interest will be of concern to the new operator and whether the integrity of the lottery will be upheld. The response to this question is not straightforward. Moreover, failure to engage with beneficiaries of national lottery funding before and after the introduction of this legislation has only added to this concern. The Minister for Public Expenditure and Reform, Deputy Howlin, seeks to change significantly the national lottery business model, making it more commercially attractive, as he perceives it, with the objective of generating the much-talked about upfront payment. This naturally makes people jumpy. It no longer will be a method by which citizens can take part in a lottery hoping to win a cash prize for themselves while at the same time contributing financially to their local communities. Under Fine Gael and the Labour Party, the national lottery will become a mechanism by which the Government can generate additional revenue. This completely undermines the ethos of the lottery but is completely in line with the Administration's small government view of the world.

Concerns have lingered over the years that national lottery funding for communities has in fact replaced funding of services that should be paid for directly by the State and such concerns undoubtedly will heighten under the current regime. The bord snip nua report of 2009 by the economist Professor Colm McCarthy only served to heighten these fears when he recommended to the Government that the Exchequer element of national lottery funding should be removed, thereby saving a miserly €1.8 million annually. Concerns remain that while the Government has not publicly signed up to this proposition, it may instead quietly act on Professor McCarthy's recommendation. There also are missed opportunities that may arise. For example, the Bill does not include the provision of moneys that could have been generated and allocated for the decade of centenary celebrations. In 1988, the lottery provided £700,000 towards the celebration of the Dublin city millennium and again in 1992 for Ireland's participation in Seville's Expo. The Government could have worked with An Post to create a really exciting engagement with citizens to encourage their participation in raising funds to celebrate our great history locally and nationally. Time and time again, the Government fails to embrace big ideas and real opportunities.

The Government's capital programme announcement of late 2011 stated boldly that it intended to use the upfront payment from the new national lottery operator to fund the national children's hospital. It appears as though this capital funding commitment has now been watered down to receipt of just one third of the projected proceeds from the upfront payment. Perhaps the Minister can clarify the purpose to which the Government intends to use the balance of the proceeds from the aforementioned upfront payment and how much of it will go towards the construction of the hospital. The failure of Fine Gael and the Labour Party to provide for the national children's hospital in the capital expenditure budget probably tells one all one needs to know about the Government's attitude towards children. It is a fact that since Fine Gael and Labour Party entered government in 2011, low-income households have become worse off. Single-parent families, the majority of whom are headed by women, have been a particular target. The bottom line is that priority projects such as the children's hospital must be budgeted for in real capital expenditure.

The Minister has spoken at length about stimulus and job creation but as always, he has done little about it. Over the past year, Enterprise Ireland and the IDA have created slightly more than 10,000 net jobs. That equates to one job for every 33 people who are unemployed. It is clear the actions of the Government do not reflect the scale of the problem. Despite the potential for capital investment and the unemployment crisis, Fine Gael and the Labour Party have cut the capital expenditure budget. While there have been successive announcements of so-called stimulus and capital projects, little is happening by way of delivery. Even Europe has warned against the withdrawal of capital investment. In May 2012, the European Central Bank President, Mario Draghi, specifically called on national governments to deal with deficits without interfering with capital or investment expenditure.

The Minister cut the 2012 capital expenditure budget by €775 million, which would pay for the St. James's Hospital site proposal nearly twice over, according to the figures from the Minister for Health. If protecting children was a policy priority of the Government, the children's hospital would be front and centre in the capital budget. It is not and we all know why.

Retailers have been central to the success of the national lottery over the past 25 years, advocating the brand and copper-fastening its integrity. Small retailers have become increasingly dependent on the modest margin paid as the crisis has bedded in. The Bill does not provide for specifics about the margin to be paid to retail agents and this offers no comfort to small local businesses who need every little bit of support they can get.

The Retail Grocery, Dairy and Allied Trades Association has stated the organisation was assured by the Minister and his officials that the modest margin of 6% paid to retail agents would be ring-fenced in this legislation, but it is not. Did the Minister make this commitment to the association and, if so, on what basis did he renege on his promise? If the 6% margin is to be protected within the licence agreement, why can it not also be included in the legislation?

As stated earlier, the Minister has offered no solid reason to establish the office of a national lottery regulator. Could this role be fulfilled by his Department instead of creating another office of public administration at arm’s length from Government responsibility? The operator will fund the regulator's office by way of a levy, but the consumer will ultimately carry the cost. I note section 15 allows for a 12-month "cooling off" period after a person has ceased to be the regulator, but why is the period just 12 months? The programme for Government makes a commitment to amend the rules to ensure that no senior public servant, including political appointees, or Minister can work in the private sector in any area involving a potential conflict of interest with a former area of public employment until at least two years have elapsed after leaving the public service.

I do not understand the lack of consistency by this Government in adhering to its own commitments. To date, the Government has not made any effort to action this promise and in some instances it appears to be ignoring it completely. Over the past couple of weeks, a member of the shareholder management unit in the Department of Finance, seconded from the National Treasury Management Agency, has resigned and been appointed as a chief executive in the Bank of Ireland. Before leaving the Department of Finance the former head of the shareholder management unit dealt with the sale of €1 billion of capital contingency notes held by Bank of Ireland. Such a scenario in the private sector is absolutely inconceivable, and middle and senior managers have par for the course cooling off period clauses in their standard contracts in small and medium enterprises and multinationals alike.

Will the Minister confirm that national lottery winnings are to remain tax free? Section 49 of the Bill allows for the sharing of information with both the Revenue Commissioners and the Department of Social Protection. The Minister announced last year that his Department was working with financial advisers, Davy, to structure the new licence to ensure an "alignment of interests between good cause beneficiaries and the new operator". Will the Minister provide a little more detail as to what this involved and perhaps a sample of the good cause beneficiaries Davy dealt with? Will the Minister confirm that potential operators who have expressed an interest to date in the national lottery licence are not also clients of Davy?

Rehab has brought a High Court challenge against the Minister for Justice and Equality’s decision to phase out the charitable lotteries scheme. Charities received €6 million under the scheme in 2011, of which €4.4 million went to Rehab. I do not expect the Minister to comment on the case but it would be helpful to understand if the case will hamper the efforts of the legislation before us today.

I have raised a number queries during the course of my contribution and I hope they will be addressed when the Minister wraps up the debate.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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I wish to share time with Deputy Mattie McGrath.

Paudie Coffey (Waterford, Fine Gael)
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Is that agreed? Agreed.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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I would have not been the greatest fan of the national lottery when it was first established and I do not generally subscribe to the idea of encouraging gambling habits as a way to finance the State.

Brian Hayes (Dublin South West, Fine Gael)
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But.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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It is not the best way to finance the State. Studies recently done by lecturers in University College, Cork, have suggested that the national lottery is socially regressive as the least well-off play it most and pay the most, although they do not receive the same amount of benefit as expended on lottery tickets. The good causes which the lottery finances do not adequately compensate for the cost or expense of buying lottery tickets in working class areas and poorer sections of the community. We should consider this study as the lottery is now established, whether the idea was good, bad or indifferent, and it has become a means to fund or otherwise resource good causes of various kinds. There is no doubt that it has done that in many areas, including sports, community development, heritage, tourism and transport. It has undoubtedly provided significant benefit to all sorts of groups and good causes. We should nevertheless examine more closely the issue of where the money that is generated is being targeted. Although many people play the game, it is played more, with more money spent, by people with the least.

We should be honest because to a certain extent the appeal is precisely to people who are struggling in the hope that a big win in the lottery might get them out of a life of struggle and toil, or just about being able to manage to pay the bills or the mortgage or look after the kids. The attraction is greater to the least well off, and the statistics and figures bear this out. If this is where most of the expenditure on tickets is coming from, most of the benefit for good causes should go back to those sections of society that are less well off.

Given that the lottery is established and is probably here to stay, the Government's position is that nothing is changing with the lottery licence. It would have been put out to tender again and whoever offers the best deal will get it. There is no big change in that regard, although we will get a bonus of financing the children's hospital. We should be absolutely clear and we all want to see the children's hospital being built, and it should be funded as a matter of priority. To attach the two issues is not sufficient to justify a move to privatise a State asset for the benefit of people in the private sector.

Ultimately, the losers will be the economy, society, the retailers who act as lottery sales agents and the players of the lottery who, as I noted, tend to be disproportionately centred in the less well-off sections of society.

When the lottery was privatised in the United Kingdom, Camelot, one of the companies in the mix for our national lottery licence, won the contract and significantly increased the price of lottery tickets, to the point that it provoked a major boycott of the lottery. As a private company interested in profit, Camelot decided to jack up prices because it believed it had a captive market of people who wanted to play the lottery. As is the case with most private corporations, it also started to pay enormous amounts of money to its executives. In one year, Camelot set aside £8 million to pay bonuses to those at the top of the company. As is usually the case where there is a large cash cow, the corporate executives at the top milked the British lottery for everything it was worth. There is no reason to believe this will not occur under the new terms the Government is proposing for the award of the national lottery licence.

Significantly, the Government is proposing to allow for an annual profit line, whereas the current position is that An Post, a semi-State company, receives €2.7 million per annum for managing the national lottery. We know how much An Post receives under the licence, whereas under the new terms it will be possible to adjust the annual profit line. If the company awarded the licence makes such an adjustment, there is no doubt it will take a bigger slice of the cake, boost salaries for executives and apply pressure to increase the price of lottery tickets. These changes are inevitable if the licence is awarded to Camelot or another private corporate interest.

The Government has tried to argue that under its proposal it will not make any difference if An Post is awarded the national lottery licence or if it goes to Camelot or a similar company. There is, however, a big difference because as a semi-State company, the activities of the former in respect of how it runs and manages the lottery are subject to a much greater degree of control by the Government, Minister, elected representatives and members of the public than the activities of a fully private, for-profit corporation.

Retailers are another group that could potentially be affected by a new dynamic operating in the lottery if it is run by a company such as Camelot. As I noted, the national lottery sales agents are concerned that the 6% of sales they receive may no longer be guaranteed.

In light of my concerns, I do not accept that it is a good idea to move towards what is effectively a full-scale privatisation of a State asset. The Government will, I am sure, argue that the sale of the national lottery will deliver upfront cash for the national children's hospital. The figures in the Bills digest provided by the Library and Research Service show there is no reason the children's hospital could not be financed through current contributions to good causes from the national lottery. In 2008, 2009, 2010 and 2011, the national lottery provided €267 million, €263 million, €243 million and €231 million, respectively, to good causes. For the past five or six years, therefore, it has consistently provided roughly €250 million to good causes. There is no reason to believe, given the consistency of these figures, that the national lottery will not continue to provide funding of this magnitude to good causes, especially given the potential for expansion through online sales and so forth. If it is certain that this sum will be generated for good causes every year, we could earmark €50 million per annum for five years to pay the estimated €250 million cost of the children's hospital. Why can we not do this and maintain the current arrangement under which the national lottery is run and managed by An Post? This option has the advantage of having a set management fee of only €2.7 million compared to the proposed moving profit line, which will benefit the likes of Camelot and other private interests.

We can secure a better deal by simply deciding to allocate €50 million of lottery revenue towards the cost of financing the children's hospital. The Government's argument that we need to go down the road of privatisation to finance the children's hospital does not stack up because this objective could be as easily achieved by maintaining the status quo. Choosing the latter would also allow the State to maintain more control of the national lottery and allay the concerns of retailers and the workforce of the national lottery. The latter is another significant group in this process and they are deeply worried about their future as a result of the move to award the contract to another entity.

The Government does not need to proceed with its proposal. Its argument about the national children's hospital is a red herring because, as matters stand, the hospital could be built using national lottery funding. If the Minister of State was not aware of that, he is now because I have just told him that it could be achieved by allocating €50 million of the €250 million we are virtually guaranteed to receive every year to the hospital project for five years.

There is no need to dispose of this State asset. The national lottery workforce and An Post have done a good job and we can get a children's hospital without messing with a formula that has worked. The Government should not let its ideological inclination towards privatisation colour the fact that the current deal is fine. We do not need to go down this route to get a hospital or continue to finance the good causes funded by the national lottery.

Mattie McGrath (Tipperary South, Independent)
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I am pleased to speak to this Bill, which has a number of worrying aspects. To pick up on the contributions of previous speakers, why fix something that is not broken? I hope the Government will not use the old flogging horse of the children's hospital. Goodness knows, that project has been delayed for far too long and far too much money has been wasted on consultants and planners.

As the Acting Chairman knows from his county, a good pre-planning meeting with planners is recommended regardless of the size of the project. How in God's name and after so much time and money have been spent did we decide on a site that is out of kilter with what the parents want? I ask an honest question - who is codding whom? In the final analysis, the sick children and their parents are suffering. It is outrageous that so much money could be wasted on a vital project with nothing to show for it.

Unfortunately, this is a continuation of what occurred during the Celtic tiger years. So-called consultants and experts have built up a gravy train industry of codding people and relieving private citizens and, in this instance, taxpayers of their hard earned revenue in return for a ball of smoke.

The national lottery was set up in 1986 or 1988. I fully support it, but I seldom buy tickets for it. I have a small story to tell of how I realised how much of a catch it was. It was a wet, stormy Saturday evening and I was called out by Waterford County Council because a tree had fallen across a road. The Acting Chairman would be aware of the place. There was no hope of removing the tree. It was a major road near Clonmel. We were going okay, although traffic needed to be turned back and people were inconvenienced. Two old dears arrived in a Mini Minor at 7.50 p.m. When we explained to them that the road was closed and they did not have a hope of getting through, they were furious. I thought that they were going to mass or somewhere else, but they wanted to go to a shop to buy a ticket for the lotto before it closed. This is why I want the real impact of the lotto and why people are interested in playing it investigated. It is a form of gambling. People have issues with gambling. In the main, however, and taking Deputy Boyd Barrett's remarks on the common good and the amount of funding for projects, community groups and clubs in all of our constituencies, it must be supported and protected.

The lotto was set up in 1986, drawing on the success of similar projects in other countries. This is an important point. When legislation was brought before the Oireachtas, the then Minister of State, Mr. Jim O'Keeffe, stated: "The function of the lottery will be to generate surplus funds that will benefit our community in a number of ways, without the need for recourse to taxation or other compulsory revenue raising measures." We were just out of a recession at the time - it was a long time ago - but those words were no more appropriate than they are today. We have taken the recourse to taxation and introduced legislation as a result of the devastating crash in the economy, orders for this and that, pension levies and who knows what else.

We must be extremely careful lest we denigrate the good work done by people in the national lottery and An Post in handling the lotto. We had the surety of the costs that An Post would receive every year. We have closed the stable door after the horse has bolted too many times. Let us step back in these punitive and recessionary times and ensure that we do not give away another golden jewel or allow another group of consultants who were appointed to look into this matter for us to recommend separating agencies from the State. Maybe some of their friends worked for those agencies yesterday, last year or whenever or might work for them next year. This merry game has gone on for too long. We need to make haste slowly.

After prizes and expenses have been paid, surplus funds are to be used for sport and other recreational activities, national culture - including Gaeilge, sin go hiontach ar fad - the arts, the health of the community - an important project - and such other purposes and in such amounts as the Government may determine from time to time. This bit can be worrying, as we have all lobbied. As a backbencher, I lobbied the last Government for groups. That was what we were elected to do. I will not say too much about it. For "such other purposes", public notice must be given in Iris Oifigiúil. It covers youth, welfare, national heritage and amenities.

These areas embrace the entire range of society. We have seen the benefits that national lottery funding has brought to the arts. It has certainly brought benefits to sports and recreation. We all know clubs that do not have facilities. There are some sad cases. There is one in Clonmel, a boxing club with which I have been involved and that has not been successful. Many hundreds and thousands of clubs have state-of-the-art facilities and are of considerable social benefit to their communities. We must protect, enhance and support this aspect. We can never allow room for fat cats to get fatter. We must have surety of tenure. I see from the Bill that the licence will last for 20 years instead of ten. We must ensure that we do not make a mistake and that consultants do not bring in glossy reports to hoodwink officials and elected politicians, as they often seem capable of doing.

From the graph given to us, money for good causes amounted to €173 million in 2002. In other years, the amounts were €187 million and €191 million. As Deputy Boyd Barrett stated, more than €250 million was provided over a couple of years in the boom times. The provision was still standing strong at €243 million in 2010 and at €231.9 million in 2011. These are considerable amounts. They have given a lifeline to many a club, society and arts group in RAPID areas when RAPID funding was being cut. Projects were supported by the national lottery with funds that deprived areas would never have seen otherwise. They could not expect to get anything through philanthropy. They paid into the lotto and enjoyed having a flutter on it. There might have been some excessive cases, but people felt that the lotto money was a payback into their communities. While some studies have found that lower socio-economic groupings did not get as much as they should have, that the money was ploughed into community groups has been seen with a great degree of respect, understanding and appreciation.

I regularly salute the doers in communities. They are the enablers. We would have a far poorer country if we did not have club and social committee activists, entrepreneurs in social housing, sports committees, sports clubs and so on. Look at our playgrounds and everything else. These people are volunteers. We must be one of the best countries in this area. For this reason, we must not change the law and allow significant wages to be paid to the chief executives of boards. Another regulator with a framework is being set up. We cannot allow growth in this area or support to be pulled back from communities.

I was in London yesterday with a committee of the British-Irish Parliamentary Assembly. We frankly and honestly discussed credit unions. I am convinced by my conclusion - British credit unions are not of the same ilk as ours. Ours are of the people, for the people and by the people. In England, there is a different attitude and credit unions are not as bottoms-up in structure. For that reason, this money is imperative if we are to allow the enablers to continue working on valuable projects across a range of areas from sport to health in their communities. Some years ago, there was a healthy community project in Ballingarry in my constituency.

It was a fabulous project. We can see what has been achieved. We can also see the transformations that have been achieved in association with the "John Murray Show". This work was being done and was funded and supported by the HSE in communities a decade or more ago. We must be careful in what we do. One could ask why one would draft legislation to introduce a change to allow a resource as valuable as the lottery to be eroded or undermined. It behoves all of us to take such a stand.

I will stray a little from the Bill if the Acting Chairman allows me. Challenges face the Waterford Leader Partnership and the two Tipperary Leader Partnership programmes. They are enablers. The system was set up by the Government and led the way with a bottom-up approach. Groups apply to them for money and they spend it willingly. Sometimes they got money in this area as well. We must challenge the attack on such partnership programmes because they know what is happening and they can deal with it. I disagree with the intention to hand over responsibility in this area to county councils. I was a member of a county council for ten years and I do not knock local authority officials. However, county councils are regulatory bodies. People see their role as levying rates, granting planning permission and controlling waste management, not as a front-line stimulator of community projects. The Minister and his officials are making a fundamental mistake in that regard. We must support and nurture those fledgling organisations. The one group that was doing such work was the enterprise boards and latterly the development companies. They have done tremendous work. The South Tipperary Development Company had considerable difficulties during its gestation period but we got over it. We have a fabulous CEO and great staff who give above and beyond the call of duty. One could ask why we would do anything to damage the good models that have been created.

To return to the Bill, the same is true of the national lottery. Perhaps the lottery needs fine-tuning but we do not need to give it to a company that would see it as a vehicle to improve its balance sheet. We do not need uncertainty on the cost of running such a project. Neither would we have to set up a regulator and team to conduct investigations. I accept regulations are required and penalties for wrongdoing. I salute the retailers of rural and urban Ireland who handle the sale of lottery tickets. We all have a chance to enjoy such entertainment as we had at the weekend in Tipperary when we thought Lar Corbett had become a multimillionaire. He had to deny it on Twitter. That could only happy in a small rural town or village where everyone knows everyone else and everyone knows what is going on and can see the benefits. It appears that Lar was not the winner so he will have to go back into training and play more games. I wish him well. I also congratulate him on his wedding.

While I accept that we must make some changes, we must make haste slowly. We must support and enhance the system. Whether one is in the heart of the city or the most rural part of the country, we must consider the benefits that have been achieved by community groups with the support of lottery funding. Much lottery funding has been wagered in communities where tickets have been bought. The lottery is a success story. Great satisfaction has resulted from it. Sports capital funding grants for this year are to be revisited again. They bring great succour and support to groups that are hard-pressed. We must return to the words of the then Minister of State, Jim O'Keeffe, when he set up the lottery because the words were never more appropriate than they are now: "The function of the lottery will be to generate surplus funds that will benefit our community in a number of ways without the need for recourse to taxation or other compulsory revenue-raising measures." That says it all. I rest my case.

Olivia Mitchell (Dublin South, Fine Gael)
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I wish to share time with Deputies John O’Mahony and Patrick O’Donovan.

Olivia Mitchell (Dublin South, Fine Gael)
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I support the objective in principle of raising capital sums from State assets. If ever we needed to sweat our assets it is now in Ireland’s hour of greatest need, or what we hope is our greatest need. I am conscious that we are coming under a certain amount of pressure from the troika to get on with the sale of State assets to which the previous Government committed. The troika must be conscious that the timing of the disposal of assets generally, not the lottery in particular, but of any asset, is crucial to its outcome and success.

As I understand it, in this case and probably in all cases of asset disposal, the proceeds will go at least indirectly towards paying down debt. We also have approval from the troika to use at least half the funding in job creation measures. It is only through getting people back into jobs that we will have any hope of paying down and keeping down our debt in the long term. As others have stated, some of the proceeds at least will go towards funding the badly-needed new children’s hospital. That in itself will be a major construction project with a significant and welcome employment content. It will be most welcome in an industry that has been devastated by the recession.

While I support in principle the concept of raising funds by way of a long-term licence, I have some concerns about the fact that we are giving a licence at the same time giving the opportunity for the exploitation of the Internet for the first time not just to buy tickets for existing games, but also for new and possibly lucrative new games. The potential has not been explored to date by An Post, perhaps because it is precluded from doing so by the legislative arrangements governing the lottery. Internet potential is being specifically opened up now. The Minister said some time ago that it is being done specifically, understandably, to make the lottery more attractive to potential bidders. My concern is that if we offer a 20-year licence at a time when we have no idea how lucrative the Internet games might be, that if they turn out to be successful beyond our wildest dreams, we will feel aggrieved that we have possibly undersold the present day value of a 20-year flow of substantial income. Perhaps it would be more prudent to opt for a slightly shorter period, for example ten years, to give us an opportunity to gauge the potential of greater Internet usage by the national lottery.

I am fully cognisant of the need for a capital lump sum and of the need to pay down debt, but I am also cognisant of the need for an annual income that would help close the €15 billion deficit that is dragging us down. It is an important judgment call for the Minister to make the choice between the certainty of a substantial upfront payment and the possibility of a substantial new flow of income as a result of more successful games through the use of the Internet and a greater flow of income.

I hope the Minister has access to the best advice and expertise as well as knowledge of the experience elsewhere in determining the minimum acceptable tender in these slightly unknown circumstances. Ideally, in a perfect market, and assuming a sufficient number of tenderers who are familiar with Internet potential, the tendering process itself should throw up the best price, factoring in the potential, if any, of enhanced Internet usage. I hope that will be the case.

I am also conscious that in a sense what is not in the Bill is of more intense interest to Members than what is in the Bill. I find that somewhat frustrating. I understand that many of the issues in which we as politicians are interested relate to the contract between the regulator and the prospective operator and are not matters for the Oireachtas but, nevertheless, they are issues that have been discussed by others. I refer, for example, to the anticipated upfront value that is being sought from the sale, the percentage that will go to prizes and good causes, as well as the agent’s remuneration and the profits for the operator.

John O'Mahony (Mayo, Fine Gael)
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I welcome the opportunity to contribute to the Bill. Since the national lottery's establishment in 1986 it has provided €12 billion for good causes throughout the country. It has changed the face of the voluntary sector through the funding of such an array of deserving causes. There is not a town or village one passes through where one does not see the beneficial effects of the national lottery and that is to be welcomed. It has been fantastic. An Post has done a wonderful job in overseeing the national lottery for the past number of years. Given the precarious nature of its financial situation, it would be hoping to retain the lottery licence. I would have a concern about the implications of the possible loss of the licence to An Post for services that the lottery benefited throughout the country in terms of the closing of small retail outlets or post offices.

A total of €231 million was provided to good causes in 2011, the last year for which we have figures. That figure demonstrates the benefits of the national lottery. A grant of €100,000 was awarded to the cystic fibrosis organisation in my constituency which is being used to provide for cystic fibrosis facilities at Mayo General Hospital. This will help people with the condition in that they will have the facilities they deserve and need and they will have them sooner than if the national lottery was not in place. That provision of those facilities would have taken another two or three years to complete were it not for the grant the organisation was given, which I welcome. The same is the case throughout the country.

I welcome the discussion on this Bill. I also welcome that the development of the national children's hospital, which we all want and the country badly needs, will be facilitated through this measure but I hope that will not impact on the money that will be available to other good causes as many of them are also important health facilities.

Deputy Mitchell spoke about the public being able to buy lotto tickets on the Internet. This is common practice in other countries but I would be slightly worried about this development for a different reason from that mentioned by the Deputy. The explanatory memorandum states: "The playing of lottery games on the internet is seen as the most likely area of growth for lottery sales in the future." As we all know, there is a short jump between buying a lotto ticket online and developing a habit of gambling online. As a society, we are seeing the devastating effect of gambling on families and the accessibility of online gambling sites is simply too much of a temptation for some people. In saying that, I do not want to be a spoilsport. The retail outlets, shops, supermarkets and the post offices very much depend on this business as well. I hope the projected growth in Internet sales would not be at the cost of the outlets that depend on these sales for their business. We need to be careful about how we approach this. Do we want to be seen to be actively encouraging the buying of tickets online? If one buys a ticket over the counter the old fashioned way, at least there is more scrutiny and it is easier to scrutinise the age of people buying tickets. I hope there would be strict regulations, structuring and warnings given to people who go online and tend to stay online using their credit cards to chase that big win. We do not want to solve one problem and create another.

Another area that needs to be examined is the proportion of the revenue that will go to good causes. I note that figure is not included in the Bill. I understand that proportion of the revenue will not be ring-fenced and I would be a little concerned about that. I also note that the provision of a sales margin of 6% for shopkeepers, post offices and so on will not be included in the legislation. Are we going to see a situation where a company gets the licence and then dramatically cuts the commission to a retail trade that is already suffering and on the edge?

In general, the Bill is to be welcomed but there are some little warning signs that need to be looked at and teased out. We must ensure that there will be funding for good causes, that it will be ring-fenced and that there will be a network throughout the country, in shops and so forth, where the national lottery will be available. We must also look carefully at the growth in online sales so that we do not solve one problem and cause another by taking in enormous profits but causing massive problems in terms of addiction to gambling.

Patrick O'Donovan (Limerick, Fine Gael)
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I am grateful for the opportunity to speak on the National Lottery Bill but before I do, I would like to acknowledge the presence of Deputy Finian McGrath because I was beginning to think we did not have a functioning Opposition. Perhaps Deputy McGrath would convey a welcome to the Whips of the Opposition, of whom there are three, but none of whom has managed to man the benches in the House for the last three quarters of an hour. It is an indictment of the Opposition that we are continuously seeing Opposition benches unmanned while there are three Whips in Opposition, all of whom are probably receiving an allowance.

Finian McGrath (Dublin North Central, Independent)
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The Deputy's comments are not in order. He should speak to the legislation.

Patrick O'Donovan (Limerick, Fine Gael)
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I welcome the opportunity to speak on the Bill. This Bill also gives us an opportunity to focus attention on the National Children's Hospital, which has been the subject of controversy for many years, particularly with regard to the funding required to build it. A previous speaker said the national lottery was being sold. Obviously he did not read the Bill or perhaps he read one of the leaflets he distributes on O'Connell Street on Saturday afternoons before he came in here because the national lottery is not being sold. Rather, there will be a tendering process for the licence in order to generate money to build a children's hospital. I do not see how people would have a difficulty with that, given that the National Children's Hospital is needed and is long overdue. The aim is to put a State asset to good use, for a fixed period of time, in order to generate revenue. That was one of the founding principles of the National Lottery in the sense that it was established to fund good causes.

I agree with the sentiments of the two previous speakers, Deputies Mitchell and O'Mahony, regarding regulators. At a recent meeting of the Joint Oireachtas Committee on Transport and Communications, the regulator for An Post appeared and, as Deputy Mitchell correctly pointed out, that office is regulating a single entity and is often dragging An Post in and out of the Four Courts on spurious issues. One such issue, for example, related to vanity postal addresses. At the end of the day, the regulator pushes the cost of the legal expenses onto An Post, a company which is already struggling. We all know the service that An Post provides in rural communities. In that context, I would be worried about the creation of a regulator, for want of a better word. As Deputy Mitchell rightly pointed out, this entity will not be competing with anybody. We did not have very good experiences with regulators that were established by the previous Government, with the support of some of the Independent Deputies in the Dáil, for energy and telecommunications. We were led to believe that prices would be reduced but in actual fact they went up. That is the legacy of the last Government and the Independents who propped it up.

It is worth noting that the national lottery makes a considerable contribution to local communities. The last round of funding allocations by the Minister of State at the Department of Transport, Tourism and Sport, Deputy Michael Ring, blew away another cobweb or legacy of the last Government in that clubs and organisations did not have to be based in the constituency of the Minister in order to receive funding. There was a much fairer distribution of the national lottery funding this time around, which was the original intention and clubs in my constituency and all over the country have benefitted. In that context, it is important that we maintain the percentage of funding for good causes, going forward. We should also distribute the funding on a much more regular basis, annually if possible. In that way, clubs that are not successful are given an opportunity to apply again within a 12 month period. There was a gap of a number of years in the distribution of funds and it is important that those who are not successful are at least able to know when it is likely that they will be able to reapply for funding.

I am concerned about the office of the regulator, in terms of its size and cost. Reference is also made to fees that might be incurred from engaging consultants. This was a practice that ran out of control in this country under the last Administration. We must make sure, in the context of constraints placed on the regulator in the legislation, that it is clear that its role is to maintain the national lottery, to ensure it is run properly and effectively and that persons who are underage are not allowed to purchase tickets.

My final concern relates to the small shops and retailers around the country who have provided a service for many years. As an Oireachtas we owe them a debt of gratitude for facilitating the sale of national lottery tickets, as well as engaging with local communities. It is essential that the existing network is maintained and that we do not have a situation whereby a new company that bids for the licence can cherry pick locations for the installation of machines. For instance, I would not like to see foreign multiples controlling the points of sale for national lottery tickets as a way of ensuring that people do their grocery shopping in their outlets rather than in small, local shops. I would be very conscious of that issue and would be concerned that we do not cosy up to large retailers or multiples that might engage in anti-competitive practices. If the regulator does nothing else, he or she should maintain the very local dimension to the distribution network.

The Bill provides us with opportunities but I am somewhat worried about the post office network. I wish An Post well and hope that the service it provides will continue. The originators of the national lottery, former Deputies Jim O'Keeffe and Donal Creed, deserve much praise because it has been very successful over the years. This Bill is about providing a national children's hospital. Deputies McLellan and Boyd Barrett would have us take out a metal detector in the hope that we might find some coins, similar to those found in Carrick-on-Suir, in order to build a children's hospital. That is not going to happen. We must put our State asset to use and this is a good use. However, I have some concerns about the details of the legislation, as I have outlined here.

Finian McGrath (Dublin North Central, Independent)
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I am grateful for the opportunity to speak on this legislation. I am delighted to see that Deputy O'Donovan is so exercised by the Independents and I can reassure him that they are all in their offices preparing their contributions for an excellent Private Member's debate on the promissory notes, which will start here in about 20 minutes.

Patrick O'Donovan (Limerick, Fine Gael)
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Are they the same promissory notes that Deputy McGrath supported?

Finian McGrath (Dublin North Central, Independent)
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I hope Deputy O'Donovan is not too upset by the recent opinion polls which show that support for Independents is running at 21%.

Patrick O'Donovan (Limerick, Fine Gael)
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Deputy McGrath might be Taoiseach yet.

Finian McGrath (Dublin North Central, Independent)
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We are up there with the big boys and girls and the Deputy must accept that.

Paudie Coffey (Waterford, Fine Gael)
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I ask Deputy McGrath to speak to the legislation.

Finian McGrath (Dublin North Central, Independent)
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One fifth of the Irish public is thinking Independent and voting Independent. That is a very sensible situation in a democratic society.

Patrick O'Donovan (Limerick, Fine Gael)
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Deputy McGrath could be back in government soon. Will he be in government with Fianna Fáil?

Paudie Coffey (Waterford, Fine Gael)
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I ask Deputy O'Donovan not to intervene further. We are discussing the National Lottery Bill.

Finian McGrath (Dublin North Central, Independent)
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I am grateful for the opportunity to speak on the National Lottery Bill 2012. Before I go into the details of the legislation, it is important to state that the national lottery has been of great benefit to this State and its citizens. I know that some of the nanny-State brigade have a problem with people betting a few euro or gambling a bit in an effort to win a few bob, but that is in our genes. The Irish people like to gamble and to get a bit of fun out of life. Then, if they lose their few euro, at least the money goes to good and deserving causes. That is why I am concerned about any attempt to give away or sell off our State asset but in fairness to this legislation, this does not appear to be the case. Nonetheless, we should all reflect carefully on this, particularly as some assets, like our forests, could be put to better use and generate income for the State in a downturn. We must be extremely cautious in that regard.

The Bill is being introduced in the context of the next licence to operate the national lottery. The current licence expires at the end of June 2013. The national lottery was set up by the National Lottery Act 1986 and has been run under licence by An Post ever since. The Bill will repeal the original 1986 legislation and will establish an independent national lottery regulator.

Beyond this, it updates the legislative provisions of the licence and operation of the lottery, although with few major alterations. Many of the details of the operation of the lottery and distribution of funds will be determined by the contents of the next licence.

These are the main issues in the Bill. I will deal with its sections later. It is important to get this legislation right as it will be in existence for the next 20 years. Efficiency, accountability and delivery to the most genuine and needy cases should be the priority. There must be no messing around or slush funds for Ministers. That is something we all must focus on in the legislation.

To date, there has been little amendment to the original legislation governing the national lottery. In 2011, there was a transfer of responsibility from the Minister for Finance to the Minister for Public Expenditure and Reform. The terms of the licence are not included in the Bill although, under the Bill, the licence should be published and publicly available, apart from commercially sensitive information. It is expected that the licence will be extended in duration from the current ten year period to a 20 year period, an upfront payment will be made by the new operator to the State and the current management fee will be replaced by the operator's fee, producing more company profits, although none of these terms is specified in the Bill.

The rationale for this approach is to help generate funds to build a new national children's hospital. I welcome that part of the proposal. No figure has been adopted although figures in the region of €400 million and €600 million have been mentioned. The primary change in the Bill is to establish an independent national lottery regulator, who will be paid by an annual levy paid by the licensee. The Bill itself will repeal the National Lottery Bill 1986.

We must zoom in on the real agenda. The money raised will be used to build the national children's hospital. This is a positive thing. As an independent Deputy, I welcome that. We have to get a move on building the national children's hospital. There is cross-party support for the hospital. There were differences of opinion regarding the location. My own preferred location was the Mater hospital site. The people of Dublin North and of Dublin bay north and across the north side of Dublin preferred that option. The decision has been made, however, and we need action. We need to put the protection of children at the top of the political agenda. This issue cannot become a political football. We have excellent staff, doctors, consultants, nurses, porters and caretakers working in our health service. It would be fantastic to have a national children's hospital that would be an example of good practice internationally and would save children's lives.

I commend the Government's brave and decent decision to introduce the new drug, kalydeco, for cystic fibrosis patients. It is a very costly drug, but the Government has done a compassionate thing for the 120 patients directly affected. If there is a funding issue in the future, some scheme should be put in place with all-party agreement. I met representatives of Vertex, the company that manufactures kalydeco, when they came to Ireland and met a group of Deputies last summer. I was impressed by their submission. They went to the Minister for Health and the HSE, and the political decision was then made by the Minister and the Taoiseach. I welcome that. The duty of an Opposition Deputy is to hold the Government to account but if the Government does the right thing, there is nothing wrong with commending it. I commend the Government on this action. As someone who has been working on the cystic fibrosis issue for many years, this is an important decision and good luck to all the families affected by cystic fibrosis. They deserve it.

Sections of the Bill deal with issues such as communities and health. This morning, I was in the Darndale estate, an area in the new constituency of Dublin bay north, which could do with money for youth services, the drugs issue and housing and health issues. Last Monday, I attended a public meeting in Howth to deal with the development of the town of Howth. Let us look at sensible proposals for putting excess money into places like Darndale and Howth to develop the economy. There is significant potential here. The national lottery is an investment fund and should be used in a commonsense manner.

Under section 5 of the 1986 Act, the surplus funds remaining after prizes and expenses have been paid are used for sport and other recreation, national culture, including the Irish language, the arts, the health of the community and such other purposes and in such amounts as the Government may determine from time to time. For such other purposes, public notice has to be given in Iris Oifigiúil, and these categories include youth, welfare, national heritage and amenities. This could be linked into a stimulus package. It would not rate as a major stimulus package but it could be very helpful. Many people are involved in the arts and we have many talented people who find it difficult to find work. We should not hold back on doing something about this. We must also develop sport as part of our national health policy. Too many people need more exercise and we need to deal with the obesity issue. We should not be afraid to look at mental health projects and do something about the crisis in that area.

Such surplus funds are paid into the Central Fund, which is administered by the Department of Finance, and are paid out of money provided by the Oireachtas. The Minister for Finance had the responsibility for the distribution of the national lottery fund. It is now administered by the Minister for Public Expenditure and Reform.

Let us deal with every case on its merits. That is all I ask. In the past, the national lottery has been used as a slush fund. That must be challenged. This was also the case under the previous Government. I know it has been the case since I entered the Dáil in 2002. National lottery funds should be distributed on the basis of need. I have mentioned projects and places, such as Darndale and Howth, that need extra funding to kick-start the local economy. I have also mentioned sport, the arts and health, especially health of the community which is mentioned in section 5 of the 1986 Act. It is important, in an economic downturn, that we look seriously at the health of the community so that when we come out of this dark hole we will have a healthy population that is prepared to take up new forms of employment. These projects can be used for employment.

The national lottery is currently operated by An Post. It holds the licence which was put out to tender in late 2001, under the previous Government, and which An Post won following a competition held between 1999 and 2001. The licence is due to expire at the end of June 2013. A subsidiary company of An Post, An Post National Lottery Company, manages the running of the national lottery. There is a management fee for An Post National Lottery Company of approximately €2.7 million.

I was supportive of the company and was glad An Post won the licence in 2001. In much of the current debate, however, there seems to be an attitude that is anti-public sector and opposed to semi-State organisations. Some sections of the public service are efficient and progressive. They can be involved in developing the economy as much as anyone in the private sector. This is often lost in public debate, particularly in the debate on banking. It was areas of the private sector, such as banking and property development, that damaged the country to the extent that the troika had to come into the State.

Companies such as An Post have a crucial role to play in Irish society. If other State or semi-State bodies have creative or radical new ideas, let us not be afraid to develop them. Many years ago, Aer Lingus and the ESB developed our economy. We must think outside the box. Semi-State companies have significant potential to develop the economy and create jobs. This is not to say there is no role for the private sector. Of course there is.

The way forward, and this has been proved internationally, is a mixed economy. If there is a mixed, efficient, healthy public sector and a small business private sector, the whole economy can be developed in a constructive and positive way. That is my experience of life. It does not come from an ideological point of view, and we should consider it.

When we look at the amount of money involved, we see the potential of the national lottery. In 2002, sales were €533 million, with costs of €79 million, prizes of €281 million and good causes receiving €173 million. In 2011, sales were €761.4 million, with costs of €104.3 million, prizes of €422.5 million and good causes receiving €231.9 million. We could do a lot of good with that sort of money. I do not know the figures for 2012 but with a budget of €231 million, imagine what we could do. I mentioned the cost of the drug for cystic fibrosis patients, which is in the region of €20 million per year. In a crisis situation, some funds could be used to develop these situations if we are in a hole.

My only concerns in the past related to the breakdown of where the money went. The Department of Justice and Equality received 1.8%, while the Department of the Environment, Community and Local Government received 36.1%. The Department of Education and Skills received a very low share, which was a surprise, while the Department of Transport, Tourism and Sport received 19.4%, the Department Arts, Heritage and the Gaeltacht received 21.4%, the Department of Health received 3.9% and the Department of Children and Youth Affairs received 17.3%. Those figures have the potential to prioritise certain issues. We must be honest and put issues like public health and safety above any economic agenda when it comes to the State looking after its citizens. The 3.9% that is distributed to the Department of Health is very low compared with the other Departments.

In the current situation every euro and cent must be accounted for. People are crying out for accountability and efficiency. We saw the waste in the past and it was an absolute scandal. Now, everyone and all parties are agreed. Those of us who had the honour of being elected in 2011 know that at every second house when we were canvassing, we were told to go into the Dáil to fix things, do our best and be honest with people, not to be wasting things and to do our jobs. That was our mandate. They also gave us a mandate for reform and change. Any party, be it Fine Gael, the Labour Party, Sinn Féin or Independent, got that message on the doorsteps. People wanted reform, change and common sense. They did not want any petty bickering for the sake of political points scoring. I make this point because there are aspects of the legislation that are progressive and I welcome them.

The national children's hospital is an important part of this debate. The programme for Government pledges to protect health capital investment. The review delivers on that commitment and includes the funding for the development of the new national children's hospital. Reflecting the importance of this project, a large upfront payment arising from the new national lottery licence will complement Exchequer funding. That is where I go back to the national children's hospital; this is the key issue in this debate. My preferred option was the Mater Hospital site but I accept the democratic wishes of the people. It has been decided and we must go ahead.

We must get on with the job now and build the hospital because there is also huge potential in the building of the hospital. Construction costs will be in the region of €400 million to €600 million, but great opportunities exist for electricians, plumbers and other skilled construction workers, with a potential 2,750 jobs during the construction phase. That is a massive boost for any economy. The Government, however, has taken its eye of the ball recently and I worry that I have not heard much about it. I would like the Government to get on with this. I will support the national lottery being used for this funding so that the children's hospital can be built. That also fits in with the talk of a stimulus package. Dublin would get a great lift from 2,750 jobs in the middle of the city, particularly the many people I know who are unemployed in Dublin Bay North, my new constituency.

The powers of the regulator are very important. Under section 38, the regulator can appoint persons to examine generally the running of the national lottery and make recommendations to the regulator. This would appear to be separate to provisions on consultants and advisers under section 2, or disciplinary investigations. Beyond this, under section 32, where the regulator is of the opinion that there is an apparent breach by the operator or a member of the operator's staff, he can appoint an investigator. These are sensible provisions.

When it comes to sanctions, where these measures are insufficient to stop a breach, then under sections 34 and 35 there is a two-tier process of financial sanction, where either the regulator imposes a sanction of up to €250,000, or the matter is taken before the High Court. People might say that is a very serious sanction but I would agree with it because it will weed out any messing about with this legislation and with the spending of money given by people. In the past we have seen too much corruption in politics and in the last few days we have seen the massive corruption in football across the world. There is nothing wrong with heavy sanctions to deal with these issues. We must also keep an eye out for the shopkeepers. They need a break in the current climate and their margins must be protected.

I welcome this debate. The Bill has some constructive provisions and I look forward to discussing it further.

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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I welcome the opportunity to speak on the National Lottery Bill. The national lottery has been extremely successful since its establishment in 1987. Unfortunately, as was the case when the lottery was established, the country once again finds itself in an extremely difficult economic position, indeed significantly worse than was the case in the 1980s, when at least we had control of our economic sovereignty. It is this overriding factor that means the Government must think outside the box when dealing with the expiry of the current lottery licence in June.

One of the main reasons the national lottery was so successful is that the public bought into the ethos behind it. As far as I recall, there has never been any hint of scandal with regard to the national lottery. People know it is run in a fair and transparent manner. They are also acutely aware that lottery money is a source of funding for many important projects in local areas. I was particularly pleased a number of important projects in County Monaghan received funding as part of this year's national lottery allocation. This included an allocation of €25,000 for Ardaghey Community Development to enable it to expand its current community facilities. I visited the community centre in Ardaghey last year and the work that is going on there is a credit to all involved. It provides services to young and old and the centre is the bedrock of the local community.

The meals on wheels service from the Aontas centre in Castleblayney received €4,000 in funding. This is an excellent service for the Castleblayney area and is a vital resource for elderly people in the area.

Furthermore, Enable Ireland received €2,000 in funding while €1,500 was provided to Cavan Monaghan Carers. These are not considerable sums, but they are critical to sustaining these important projects which are of significant benefit to local communities in County Monaghan and across the country.