Aideen Hayden (Labour) | Oireachtas source

I welcome the Minister of State to the House. I agree with my colleague, Senator Byrne, that we are pleased indeed to have him in the House on his first appearance in his current official function. I welcome the legislation before the House. If I was to be absolutely honest about it, it is a little overdue. It has been on the cards since the beginning of the Government's term in office. Anyway, it is certainly welcome and contains several important features.

I take this opportunity to acknowledge the undisputed success of the National Treasury Management Agency. The Minister of the day took the view that to create such an agency outside of the permanent Civil Service would give a certain amount of freedom in terms of recruitment, management and so forth. It has been a highly successful operation and perhaps as a testament to that success several other functions have come within its remit over time.

I wish to comment on the legislation and some of the broader issues. I question the role of the State Claims Agency within the overall umbrella. To my mind there is considerable justification for some of the other arms of the NTMA and its various cloaks, whether it is wearing the NewERA cloak, the Ireland Strategic Investment Fund cloak or whatever cloak it is wearing. The State Claims Agency does not necessarily fall comfortably within the NTMA in that sense. It has 77 employees and deals effectively with legal costs. I am simply throwing it out there. Given the expertise of the NTMA and the various roles that fall within its remit in terms of investment, treasury management and so forth I am unconvinced that what is effectively a legal costs operation should fall within the agency's remit.

Several criticisms have been made about putting the National Pensions Reserve Fund within a new body whose remit is entirely investment within the State. Those criticisms fall within two camps. One camp maintains we should have done this far sooner, that we should put all our eggs into the Irish economy and use the money in the National Pensions Reserve Fund to stimulate the Irish economy, irrespective of whether we are looking for an economic return. The other arm of the debate is along the lines that we must look to the future, we have an ageing population and that it took us long enough to acknowledge that we could not continue to pay pensions out of current expenditure indefinitely, especially since over many years public servants and ordinary citizens have paid into the National Pensions Reserve Fund through PRSI contributions and have a right to have that money protected. In reality, because of the banking crisis we have seen a certain proportion of that money go towards recapitalising the banks, to the point where we are basically putting forward what is left of the fund for investment in the Irish economy. I believe this proposal answers those two concerns. It is important that we stimulate the Irish economy. In fact, it is critical, but is also critical that we protect the interests of Irish pensioners in future. Therefore it is important for the Ireland Strategic Investment Fund to have a commercial mandate and I welcome that it does.

As Senator Byrne noted, how that fund invests in future will be critical for the Irish economy. The Minister of State referred to certain areas in his speech. I agree completely with Senator Byrne that we have a major issue with infrastructural investment in this country which is not covered by the areas the Minister of State mentioned. One of these areas is social housing. We need to look outside the box in terms of how we use the funds available to deal with that particular infrastructural deficit, which is certainly a major infrastructural deficit at the moment.

Several of the comments made on this legislation in the Dáil were highly critical of the idea that we would require a 50% or 50% plus engagement of private funds with the ISIF. There has been considerable criticism of public private partnerships in the context of social housing but I believe much of that criticism is perhaps overstated. Recently, I had reason to be in Fatima Mansions. When we consider the redevelopment of Fatima Mansions there is no question or doubt but that the community there has benefited considerably from the private investment. It is unfortunate that PPPs are now decried as a bad thing. This is not to say that in future we cannot have successful PPPs when it comes to investment, particularly investment in social housing. We need to look to the stock of State assets, particularly the social housing stock, and examine how it can be leveraged in future through something like the ISIF to put investment into social housing. I completely agree with my colleague, Senator Byrne, that this critical issue must be addressed.

One of the criticisms made about NewERA is that it is a vehicle for privatisation. In fact if I had any criticism to make about how we should progress with NewERA, I would make the opposite argument. I believe NewERA should be a holding company for the State in respect of all of its assets. NewERA should holds assets on behalf of the State and semi-state companies. Perhaps one of the fences that we need to jump emotionally is to see the entirety of our State investment as a source of further investment in future. Let us think back to the 1950s and 1960s. When State companies were set up, they were set up with a reason - to fill a gap that could not be filled by other enterprises. Now we look at them as sacred cows that cannot be interfered with. I prefer to see them as a source of funding in order that we can look at other issues that we are not addressing, for example, new technologies or, for the sake of argument - I would not even dream of mentioning it in this House - potentially looking at other sources of energy like nuclear power. We should not see the stock of our current State enterprises as cast in stone. Rather we should see them as something that we can leverage in future for the benefit of our society.

There is no question or doubt that unless we have stimulus in the Irish economy coupled with reasonable growth and, dare I say it, reasonable inflation we will be unable to come out of the situation we are in. This is positive legislation, especially in terms of building on the success of the NTMA model. It recognises that we have State assets that we can leverage. It also recognises that we need to leverage these in a way that protects the interests of pensioners. It acknowledges the need for stimulus in the economy. I am very much of the view that we stand at a critical path now. We cannot continue to remove money out of the Irish economy. We cannot borrow as a State in the way we would like to or in the way other Governments before us had the privilege of doing. We need to think outside the box. I believe that moving assets into ISIF is indeed the way to go, but it must be done in a commercially sensitive way and with the future interests and security of pensioners at its heart.