Sean Barrett (Independent)

Like other Members I thank colleagues for tabling the motion. One of the things we are finding at present, with a view to events next week, is that we have lost a bit of our radicalism and we will have to address the reform agenda. I do not know what way things will work out next week. We inherited a situation when we were elected as Members – 42 of us were new – that the country had to be rescued by the IMF and is in serious trouble and that we must think of new ways of doing things because the established ways are not working. That is where we are now – broke.

Asset disposal is referred to in the McCarthy report and privatisation is an inevitable part of trying to put the country's finances together again. Every time we raise one of the ways in which we might secure asset disposal there is always a chorus of objections. We can reject every individual case but the overall package is that the State in this country is too big to be supported by the revenues and either we will end up looking at the options such as we have today or opt for cuts in the number of special needs assistants or to the carer's allowance. Some kind of shrinkage of the State must be considered. Selling what in my younger days used to be known as raffle tickets is fairly low down on the list of national priorities. Competitive tendering is the right way to go about it. An Post might win again, as the Minister for Public Expenditure and Reform, Deputy Howlin, said. That would satisfy many people, but by having competitive tendering it would go through every ounce and inch of its cost base and see how much it could bid upfront for the money which would be used for the children's hospital, as we are assured will be the case.

That kind of competition is good as it tackles cost and promotes innovation. It is also the worldwide experience. The economists writing in 2002, Megginson and Netter, indicated that this is a trend worldwide, in particular now that governments are in so much trouble, that they look at assets they can realise. They say that in the past 20 years - to 2002 - the percentage of global GDP takings of state-operated enterprises declined from 10% to less than 6%. Therefore, it is happening. According to the McCarthy report, we have approximately €8.5 billion already in privatisation receipts. Let us imagine the greater difficulties we would be in if we did not have them. Some of them are spectacular successes such as the Kerry Group, which the Minister, Mr. Mark Clinton, sold to Mr. Denis Brosnan and friends. It is now a spectacularly successful company. The B&I line was always in trouble in State ownership and it was sold. It now operates without assistance. Other examples include Greencore and Great Southern Hotels.

The Minister, Deputy Howlin, mentioned on the previous day when we discussed the matter that in his constituency of Wexford a power station had been sold and now contributes to the national grid and the local economy. Sometimes we get concerned. Trees seem to be a particular issue of concern. We can take a bid for trees now on what they will be worth in 20 years' time, in which case they will be cut down and taken away by someone and made into something else or we can sell them now and take a gamble. I do not think there is any great ideological issue. Ditto with electricity. I do not have a difficulty with having some electricity stations sold off and in private hands. In addition to meeting some of our IMF targets, it is not a major disaster if when one turns on the lights some of it has come from privately run power stations. There are efficiency gains because Megginson and Netter also say that privatisation works in the sense that divested firms have almost always become more efficient, more profitable, increased their capital spending and become financially healthier.

The dilemma facing the Cabinet is not the worst possibility. Other examples come to mind. Mr. John Teeling bought the industrial alcohol plant on the Cooley Peninsula and developed a major whiskey business, which he sold for a substantial sum. The State should be more flexible in its asset portfolio. The priority should be to try to retain money for health, as in this case, and education. Some of the other functions are not the core functions of government and arise for review in the appalling situation in which we find ourselves.

We will need this debate frequently, although not just on this issue. I commend my colleagues opposite on tabling the motion. When the State gets too big for its budget, there must be parliamentary debates on which functions should be dropped and which should be put up for competitive tendering. I welcome the latter action. One of the lessons we have learned is that so-called beauty competitions are unsatisfactory and result in vast legal and tribunal costs.

As we try to pay our way and exit this debt trap, we must consider how to work better. That involves Members on all sides of the House tabling motions such as this one. The State must live within its means. Anything else is a tax on future generations of people who will inherit a vast debt.