Bernard Durkan (Kildare North, Fine Gael)
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8. To ask the Minister for Public Expenditure and Reform if consideration will be given to the raising of a Government bond to fund the provision of critical infrastructure as a means of providing funding for vital areas, in which investment might otherwise be postponed because of the requirement to keep such expenditure off the Government’s balance sheet, in view of the fact that it would have the added benefit of utilising savings already available on which the Government can only receive DIRT at a low rate owing to current interest levels; if a particular examination has been carried out of the areas of the economy that require infrastructural investment which might benefit from such a provision; and if he will make a statement on the matter. [11691/15]

Bernard Durkan (Kildare North, Fine Gael)
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This question raises the prospect of the use of a Government bond to fund the cost of particular elements of critical infrastructure without affecting the Government's balance sheet.

Brendan Howlin (Wexford, Labour)
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As the Deputy is aware, the National Treasury Management Agency, NTMA, issues Irish Government bonds which attract investment from institutions and individuals.  Other financial investment options are also available to those who wish to direct their savings to help to support the Government's work in promoting economic growth, including the national solidarity bond, savings bonds, savings certificates and instalment savings. All moneys raised through Government borrowings are paid into the Central Fund and used to fund Government spending as approved by the Oireachtas. It has never been the custom to link borrowing with specific projects as to do so would limit the flexibility of the Government in managing the State's finances. That said, the public private partnership, PPP, programme allows for private sector investment and risk sharing in the provision of specific public infrastructure projects. Because of their funding and risk profile, the up-front costs of these projects are not included in the calculations of general Government spending and thus this approach has allowed the Government to supplement its traditional Exchequer capital programme.

The Department of Finance and the NTMA which lead in financing the State have considered other possible approaches to increasing funding sources.  One of the Government's recent initiatives in this regard has been the establishment of the Irish Strategic Investment Fund which will harness public and private sector sources of funding to provide commercial investment, including in public infrastructure projects.

As the Deputy will be aware, my Department undertook a review of the public capital programme last year. The review sought to assess all areas of public capital investment and refresh the existing investment strategy and multi-annual envelopes to ensure critical infrastructure deficits were identified and addressed.  We need also to ensure our limited resources are focused on the areas that can best support continued, sustainable and equitable growth.

Bernard Durkan (Kildare North, Fine Gael)
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I thank the Minister for his positive reply. Is consideration being given to utilisation of the approximately €90 billion in personal savings on which DIRT tax is chargeable, which tax yields no great return for the State, to fund the critical infrastructure projects referred to by the Minister? If not, will he consider that prospect, particularly in the context of the current shortage of housing which also forms part of critical infrastructure?

Brendan Howlin (Wexford, Labour)
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I thank the Deputy for his suggestions which I take on board. Borrowing by the Government does not present a difficulty at this time. The Deputy will be aware that for the first time in the history of the State the Government this year issued 30 year bonds at the unprecedented low interest rate of 1.8%. Our treasury bill - three month roll-over money - issued last week had accrued a negative interest rate. In essence, people are paying us to hold on to their money. This is the first time that this has happened in the history of the State. This stems from the confidence of international lenders in the state of the economy.

On the Deputy's specific point about housing, €2.2 billion has been allocated and a bespoke funding mechanism is being created. I have allocated some of the resources derived from the sale of State companies to this mechanism which will be leveraged by other investment to ensure there will be a sufficient pool of money to deal with the housing problem, one of the real structural deficits in a growing economy.

Bernard Durkan (Kildare North, Fine Gael)
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Is the Minister prepared to examine every possible aspect of funding to ensure the maximum amount of funding will be made available in this area in the shortest possible time, given the urgency of the issue? Will he also ensure equal treatment for the need to address other infrastructural deficits in various areas throughout the country to better facilitate economic recovery?

Brendan Howlin (Wexford, Labour)
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I can give that assurance to the Deputy. A meeting of the board of the NTMA held yesterday was attended by the Secretary General of my Department. I have met the National Development Finance Agency, NDFA, on a number of occasions to ensure there will be in place a robust mechanism to fund critical infrastructure. This side of the summer I will be publishing the new multi-annual capital investment programme. While it is proposed to expand the volume of money to be spent on the capital side, there are, unfortunately, restrictions on us in this regard. It is not proposed to return to the level of spend during the boom times, when at one stage €9 billion was being spent on capital works annually. We will not be able to reach those dizzy heights again for a long time. However, whatever is done will be done in the context of prudent budgeting. I want to ensure critical infrastructure deficits in the economy, in particular, housing, as mentioned by the Deputy, will be fully addressed.