Michael McGrath (Cork South Central, Fianna Fail)
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84. To ask the Minister for Public Expenditure and Reform if an instruction has been issued to commercial semi-State companies in respect of dividend payments for 2015; and if he will make a statement on the matter. [3196/15]

Brendan Howlin (Wexford, Labour)
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Under the NewERA initiative (whereby NewERA provides financial and commercial advisory services to relevant Ministers on the activities of certain commercial State companies) the Government has reformed the manner in which it manages its relationship with the Commercial State Sector. As part of the reform, NewERA has developed, in conjunction with the relevant Government Departments, a Shareholder Expectations Framework intended to provide clarity and guidance for each of the 6 commercial State entities within its remit in relation to the Government's strategic priorities, policy objectives, and financial performance and reporting requirements. Shareholder expectations letters based on this Framework have now been issued by the respective Ministers to ESB (in 2013) and in 2014 to each of EirGrid, Bord na Móna and Coillte. It is intended that such letters will be issued to each entity on an annual basis going forward.

One of the areas addressed in these shareholder expectations letters is the company's dividend policy.  Historically no explicit guidelines have been given to State companies regarding dividends.  In recent years, dividends of approximately 30% of profits after tax have been sought from most commercial State companies. An additional €100m was also sought from the sector on foot of Budget 2013.  The shareholder expectations letters now ask the Boards to engage with NewERA with a view to developing a new formal dividend policy for each company, which would strike an appropriate balance between the payment of dividends and re-investment in the business.

My Department is also working with other relevant Departments to review the shareholder management and oversight arrangements applying in the case of the wider commercial state sector (i.e. those commercial State companies which do not currently come under NewERA's remit).  The objective here is to introduce a more structured and consistent approach to the management and oversight of these companies, and thus the entire commercial State sector, building on the experience that has been gained from the new shareholder management arrangements that have been put in place for oversight of the NewERA companies. This will include the issue of a shareholder expectations letter to the Board of each such company, modelled on the approach adopted for the NewERA companies, which will set out the views and expectations of the Ministers, as shareholders, including the expectation that an appropriate dividend policy will be developed in consultation with the relevant departments.