Joan Burton (Dublin West, Labour)
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26. To ask the Minister for Arts, Heritage and the Gaeltacht the progress of the investigation into the establishment of a public banking system here by her Department; the likely timeframe for the investigation; the stakeholders involved; the way in which interested parties can make submissions to the investigation; and if she will make a statement on the matter. [11608/17]

Joan Burton (Dublin West, Labour)
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How is the examination of the establishment of a public banking system in this country going? Today has been a very bad day for rural Ireland. We have heard reports indicating that up to 80 post offices are to close. In recent days, we heard the bad news that up to 30 branches of Ulster Bank are to close. Many of those branches are in the Republic of Ireland, most likely along the Border. The creation of another banking structure to allow people in small towns and villages to have a banking service should be of the utmost importance to any Government that claims to have a regional policy. What is happening in this regard? Progress seems to be incredibly slow.

Michael Ring (Mayo, Fine Gael)
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The programme for Government envisages that An Post, the Irish League of Credit Unions and other interested stakeholders will be asked to investigate and propose a new model of community banking, such as the Kiwibank model in New Zealand, which could be delivered through the post office network.

The programme for Government also includes a commitment to investigate the German Sparkassen model for the development of local public banks that operate within well-defined regions.

The role of my Department in this regard is to work with other Departments and stakeholders to examine the feasibility of these and potentially other models of community banking.

My Department is actively working with the Department of Finance to make progress with the commitment in the programme for Government.

Both Departments are following an agreed work programme on this matter. A public consultation was launched on 2 March to seek views on the community banking model. Interested parties are invited to submit their views to my Department by 29 March.

5 o’clock

Submissions may be made via my Department's website or by post. Further details are available on the website.

A number of key stakeholders have also been contacted directly and have been invited to meet representatives from the two Departments. Senior officials from both Departments recently met representatives of the German Savings Banks Foundation for International Cooperation and Irish Rural Link to discuss the viability of the Sparkassen model of local community banking in an Irish context. All views received on this matter will be carefully considered and I anticipate that work on the examination of community banking models will be completed by the middle of the year.

Joan Burton (Dublin West, Labour)
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I thank the Minister of State for confirming there has been engagement with both the Sparkassen bank and, perhaps, the German Government, which has been promoting this idea. In my experience as a Minister for over five years, the greatest impediment to this was the Department of Finance, so I am interested to hear the Minister of State say the same Department is now being co-operative. In my time as Minister for Social Protection, I fought very hard and quite successfully to prevent the closure of post offices in the teeth of a very difficult financial position that we inherited. I also set up a small micro-credit scheme operated by credit unions, which has been very successful in helping to keep people from the hands of moneylenders. I also established through the Money Advice & Budgeting Service, MABS, in conjunction with the Department of Justice and Equality a special help service for people in trouble with their mortgages and banks when it came to debt. All of that was accomplished without any very positive co-operation over a very long period from the Department of Finance. It was actually the contrary.

What is the timeline for this development? We are all aware the life of this Government may be short. One of the reasons rural Ireland is in some difficulty in the mean time is that its financial institutions are disappearing, particularly from smaller towns and villages. Without financial institutions, it is very difficult to have local small and medium enterprises develop. Where will they get credit?

Michael Ring (Mayo, Fine Gael)
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I hope the Deputy and her colleagues on the committee will make a report that can be examined by the Department of Finance and my Department. It is envisaged the report I mentioned will be ready and submitted to the Government some time in the middle of the year. I hope we get plenty of interest. As I said, we have contacted many outside groups seeking for them to make submissions. We have had discussions with Irish Rural Link and the German banking company. I hope many people will make submissions to the Government in order that it can consider them and respond to the issue. It is a part of the programme for Government and I hope it will be honoured.

The Deputy mentioned she was a spokesperson for many years on finance issues and she was a Minister in the previous Government. She knows how the Government works and if people want something to happen, it will happen. I hope this will happen and the Deputy is quite correct. I hope the credit unions will make a very strong submission. They are already a proven entity and are there to support rural communities. They have a role in this as well.

Peadar Tóibín (Meath West, Sinn Fein)
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The major problem is that the Minister for Finance, Deputy Noonan, has made an oligopoly in the State by creating two banks, which he refers to as pillar banks, with 80% of the market. When there are two large beasts with such dominance within a market, they can pretty well determine the functioning of the market by themselves. They can determine location, price and level of service within a market, which is exactly what they are doing. They are withdrawing from less profitable bases because they know they can retain customers as they have no other options. One would imagine a free market political party like Fine Gael would be happy to see extra competitors within the market. We in Sinn Féin have been ranting about this for years and four or five years ago I launched a document on public banking and sent it to the Minister of Finance. It is jaw-droppingly difficult to watch the death of rural Ireland while at the same time credit unions are not allowed to use the €10 billion they have on deposit for the good of the rural economy.

Éamon Ó Cuív (Galway West, Fianna Fail)
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I often think those who do not live in rural Ireland have a kind of funny attitude about doing business there. There are very substantial businesses in rural Ireland, particularly in the west, as the Minister of State knows. The problem for entrepreneurs is not the physical location of a bank but rather getting finance, especially equity finance from venture funds into businesses. The idea that €50,000, €100,000 or the limits of the friendly credit union can really sustain a business does not match my experience of running a business in the west. It was not that big when I was there. What will the Minister of State do through the Western Development Commission investment fund to ensure these people have adequate funding to give money to businesses in the west?

Michael Ring (Mayo, Fine Gael)
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Comments were made about competition between banks and the Minister, Deputy Noonan, creating two banks. He did not create those banks and the banks created the biggest problem we have had since the foundation of the State. Let us not forget about that. The banks brought this country to its knees and the Minister, Deputy Noonan, is the Minister for Finance who saved this country from I do not know what.

This Government has given a commitment and what we need is competition in the market. We need to ensure we make the right decision and whoever is put into the market should survive and be able to provide necessary capital and funding for small businesses throughout the country. We need a bit of competition. Deputy Ó Cuív is correct in saying this is not about banks or post offices but rather people's ability to get money. The Western Development Commission has a substantial fund and at the end of the year I gave it further money because it has a job to do. It does that very well and we must support small businesses. We need to be able to give people capital when they want it.

There is ongoing consultation and I hope all political parties, the public, banks, building societies and those who want to get involved with banking will make a submission. That will give us the opportunity to consider what we can do about banking in this country.