John Deasy (Waterford, Fine Gael)
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It is now clear that while we may be experiencing a recovery as an economy, we are not experiencing an evenly spread one. Dublin has outpaced all other areas when it comes to generating increased economic activity over the past few years, followed by Cork and Galway. Outside these and some other urban areas, people can see and feel the gulf that is getting wider. Their sense of a rising tide lifting some boats but not all is deepening. They wonder if the Government is doing anything about this economic phenomenon. They know it exists and is becoming more obvious as the weeks go on. The truth is that parts of the country are still in recession or, at best, stagnating economically while other parts recover and achieve elements of economic normality.

Last week, Teagasc published a report on the economic strength of rural towns. The upshot of the report was that rural towns have had a lower focus in national development strategies over the last decade and a half. What has happened over the last few years in particular is that, rightly, the focus has been on regaining our international reputation among outside investors. A good job has been done in that regard so far. However, the recovery has become unbalanced. Through no one's fault, annual investment into Ireland has gone exactly where it is needed least, namely Dublin, Cork and Galway. These are the three urban locations where 82% of foreign direct investment has ended up over the past 20 years.

When I read about the conversion of the NTMA controlled National Pensions Reserve Fund of €6.8 billion into a commercial investment fund to be matched by €6 billion to 7 billion in private investment, it suggested the obvious question of whether anyone had considered earmarking some of the money for the areas worst affected by the recession. The answer I am getting is a resounding "No". I asked the question of the Secretary General of the Department of Public Expenditure and Reform. His answer makes it crystal clear what the story is. He wrote to me that there is no regional angle or perspective to this. He indicated that as far as he was aware there had been no regional impact consideration. Mr. Watt went on to communicate something that really caught my attention. He said that when the Department examines Exchequer funding and our public private partnerships, it has regard to a spread from the political world in terms of which money is allocated. That means money is still being allocated not on the basis of need but on the basis of political influence.

As far as I can see, no account has been taken within Government as to where money has or has not gone in the past and where it should or should not go in future. It is a mistake the Government cannot afford to make. I am already hearing about Ministers telling county managers about money coming down the line from the sale of State assets through particular Departments. The Department of Finance should - and easily could - look at where the investment of State finances has gone in the past ten or 15 years, examine where the unemployment rates are lowest and consider a policy of domestic investment in those areas that need most assistance.

I am not sure if it is a good or bad thing that the Minister of State replying is from the Department of Finance given that he is running in the Dublin area in the European Parliament elections. I look forward to his response.

Brian Hayes (Dublin South West, Fine Gael)
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I thank Deputy Deasy for raising the important issues of how Ireland's strategic investment fund will be managed, its remit, its mandate and how it will deliver balanced development for our country. I note to the Deputy that I have a foot in both camps in this context as a Minister of State at the Department of Public Expenditure and Reform and at the Department of Finance. I wear both hats today.

John Deasy (Waterford, Fine Gael)
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In that case, the Minister of State is doubly responsible.

Brian Hayes (Dublin South West, Fine Gael)
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Establishing the strategic investment fund is a key component of the medium-term economic strategy published in conjunction with our exit from the EU-IMF programme. The stated objective of the plan is clear. It is to return the economy to full employment by 2020. The strategy recognises that an essential ingredient of economic success in job creation is the availability of financing and capital to allow existing companies to grow and new innovative companies to be formed. In the medium-term economic strategy, we have set out our ambition to develop a more diversified, competitive and responsive infrastructure which can finance growth across the economy. As the economy grows and demand increases, it is essential that well priced financing is available to support businesses to grow and develop. Developing alternative sources of finance for infrastructure projects and businesses across all sectors of the economy, including agriculture, construction and technology, is essential.

Building on the programme for Government commitment and the medium-term economic strategy, drafting of the National Treasury Management Agency (amendment) Bill is at a very advanced stage. Amongst other things, the Bill will establish the Ireland strategic investment fund, or ISIF, to make €6.8 billion from the National Pensions Reserve Fund available for commercial investment in Ireland to foster economic growth and employment. The National Pensions Reserve Fund was originally established to make investments globally with a view to pre-funding social welfare and public service pensions. While the need to provide for social welfare and public service pension obligations has not abated, fostering economic growth and employment is currently a greater priority. By creating jobs and growing the economy, the State will be in a better position to meet its long-term pension obligations. The legislation to establish the fund will be published shortly and I hope to see it become law by the middle of the year.

The fund will have a broad mandate to make commercial investment decisions that support economic activity and employment. While supporting economic growth and employment is clearly the end goal, the commercial nature of ISIF is an important part of its mandate for two reasons: it will magnify the impact of the resources of the fund by making it attractive to third party investors and it will allow ISIF to recycle its investments over time so as to be able to invest in new strategic priorities for the State.

The mandate for the fund will be set out in legislation and the NTMA will periodically consult with the Minister for Finance on ISIF's investment strategy and take into account the views of the Minister so the strategy is consistent with Government policy. The investment mandate will encompass a number of principles. It will be expected to earn a commercial rate of return and it will be designed to support the productive capacity of the economy. The investments should be capable of aligning the interests of various State actors, in particular with regard to energy, water and telecommunications. It will also have regard to Government policy and objectives, including sectoral policy, in making decisions on investments, and the investments should not have negative implications for the general Government balance or general Government debt.

An investment committee will be established which will have discretion to make investment, disposal and asset management decisions for all investments of ISIF, within the parameters and the investment strategy set out by the NTMA board, subject to the mandate of ISIF and having regard to Government policy objectives.

John Deasy (Waterford, Fine Gael)
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By most economic indicators, the US stimulus plan of 2009 was a success, so I took a look at how it was structured. It substantially cut taxes to families, but significantly it spread the money in almost every way throughout the 50 US states. Transportation and mass transit projects were begun, federal buildings were modernised throughout the US and there were projects dealing with water, weatherising homes, school buildings and broadband infrastructure in rural parts. It concentrated on helping small businesses with tax deductions, credits and loan guarantees wherever they existed throughout the US.

We have a stimulus package in Ireland, and it is structured in such a way that 90% of the €6.8 billion of State money, which the Minister of State mentioned, could end up going exclusively into the urban economy of Dublin and its surrounding counties. At the same time no one in the Departments of Finance or Public Expenditure and Reform is taking account of where other Exchequer funding and private investment is spent throughout the country. We know at least 80% of jobs created through IDA Ireland companies end up in three urban areas and locations and this trend is continuing.

If a portion of the strategic investment fund is not diverted or earmarked towards locations which need it most, the money from the sale of Bord Gáis and other State assets needs to be directed specifically to these areas which have not seen any substantial inward investment in the past ten or 15 years. If I were to describe the Government's policy or lack thereof, when it comes to regional economic disparities it is beginning to resemble a form of economic laissez-faire, letting it be and letting the natural world take its path. This is becoming unacceptable and a very dangerous political path for the Government. The Minister of State's response compounds exactly what I have suspected for some time. No thought has gone into these issues when it comes to the economic disparities which exist throughout the country.

Brian Hayes (Dublin South West, Fine Gael)
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To reply to my colleague and friend, it would be a disgraceful situation were it the case but it is not the case. To present the strategic investment fund as the only avenue of capital funding is also a gross distortion. To be frank, the existing capital programme, which is set from 2012 to 2016 and totals €17.5 billion, is significantly bigger than the €6.8 billion to which I referred in my remarks. The PPP projects, which we have got over the line because we are out of the bailout programme, are bundled throughout the country. For instance, the next school bundle of PPPs, which is all about Exchequer funding coming from different sources, will be established in places such as Galway, Wexford and Ballinamore-----

John Deasy (Waterford, Fine Gael)
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We are well aware of that. I am speaking about the investment fund.

Brian Hayes (Dublin South West, Fine Gael)
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The investment fund is one arm of capital investment but it is not by any stretch of the imagination the only one. The key issue on which Government policy is determined in making decisions is not on the basis of political priorities. It is on the basis of what will make the economy more competitive in the long run and what are the key things we need to do, from an infrastructural perspective, which will help a stronger recovery happen. Where this is located is secondary to the principal priority of making the economy more competitive.

The point must be made that if we get this decision right it will help economic growth in the long term. In the same way one could argue the roads projects over the course of the past decade have greatly helped access and transport routes throughout the country. Of course the Government is minded to take a holistic view when it comes to the economy and especially how these funding decisions are to be taken, but to present this as the only vehicle upon which capital infrastructure will be determined is a gross distortion of the facts, notwithstanding the need to have balanced regional development where it makes sense, where the economies of scale are right and where the economy can grow as a consequence of that spending decision.

Michael Kitt (Galway East, Fianna Fail)
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Does Deputy McNamara wish to defer debate on his Topical Issue matter?

Michael McNamara (Clare, Labour)
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I understand the Minister is at the beef summit, which I greatly welcome, and so I will defer this Topical Issue. However I will return to it in the first week of the next term to see what results, if any, accrue from the summit.

Dinny McGinley (Donegal South West, Fine Gael)
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Unfortunately, neither the Minister nor the Minister of State is available due to commitments outside the Dáil today. As such they have asked me to convey they would be very grateful if the Topical Issue could be deferred until the next time the Dáil sits, which is scheduled to be 30 April 2014.

Michael McNamara (Clare, Labour)
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I am very happy to defer it until then. It is difficult to see how real progress can be made until live shipping is facilitated because at present processors are increasing their capabilities to produce beef and thereby are manipulating the markets.