Vol. 416 No. 6
21 Mr. Noonan (Limerick East) asked the Minister for Finance if he will outline the reason the Government changed their policy of not using the proceeds from the sale of shares in State companies for current expenditure purposes, and if he envisages further sales of this nature being used for current Government expenditure.
The Government's policy in relation to the proceeds of sales of State assets is that they will be used to reduce borrowing, and thus to help ease the burden of the national debt and of debt-servicing costs.
There has been no change whatsoever in that policy. The established accounting treatment of the proceeds of such sales, whereby any receipts of this nature are treated as Exchequer capital receipts was, as the Deputy should be aware, maintained in the 1992 budget. The proceeds of the recent disposal by the State of part of its remaining shares in Greencore are being taken to account in precisely the same way as those of the original flotation last year.
Under this accounting treatment, the question of using such funds for current expenditure purposes does not arise; to the extent that debt-servicing costs are reduced by such sales there is, of course, a saving on Central Fund Services.
(Limerick East): The Minister is either misleading the House now or he did so last week replying to a Private Notice Question. Using the proceeds from the sale of shares in Greencore for current expenditure purposes is contrary to commitments given by the Taoiseach — when he was Minister for Finance — at the flotation of Greencore and Irish Life——
Hear, hear.
(Limerick East):——and on several occasions subsequently. When the Minister replied to me last week he used the argument that he was short of money to pay the commitments arising from the Programme for Economic and Social Progress and that he sold Greencore shares to get the money for the pay bill.
I was not deceiving the House last week, nor am I doing that today; it is something I have never done in this House. I used the argument regarding the Programme for Economic and Social Progress on the basis that things change, and that applied to Greencore shares. I said that we had to change rules in consultation with the social partners, particularly public service workers, in relation to the Programme for Economic and Social Progress. I did not say that the money was being transferred; the Programme for Economic and Social Progress is costing less this year. The accountancy method used of Exchequer capital receipts is the same one which has been used over the last number of years. I will give a few examples: in 1989 the sale of Tara Mines was treated in the same way; in 1990 a number of shares were sold, including those in Irish Spruce; in 1991 there was the sale of Greencore shares, Great Southern Hotels, IDA redemption of shares and Irish Life shares. This year Greencore shares are involved, so the accountancy method is exactly the same.
(Limerick East): The Minister's comments today are totally at variance with what he said last week. He informed the House last week that something in excess of £50 million of capital receipts would be dedicated to the budgetary arithmetic, not for the reduction of the debt.
That is correct.
(Limerick East): The Minister is now changing his story and going back to the formula announced by the Taoiseach when he was Minister for Finance. I at least welcome the change in the official explanation even though it probably amounts to the same thing in practice. I further put it to the Minister that he did not make this at all clear on budget day; that he misled the House on budget day and the budget, which was seriously flawed on the day, is now even more flawed because there is a further discrepancy of £33 million in it.
I have to say that the time available to us for these questions is well nigh exhausted.
I am not going to correct Deputy Noonan every time he says I mislead the House because he continually says that I mislead the House. I did not mislead the House on budget day. The Deputy asked what is the accountancy practice. The accountancy practice for disposal of shares is in the Exchequer capital receipts. I want to make it absolutely clear that it is the same process. The Deputy answered the question himself. Regardless of whether the amount is taken off the accumulated debt up to the end of the previous year or taken off the debt in the current year, it is the same thing. Therefore, it does not make any difference.
It is not the same thing.
It is.
(Limerick East): It is not good budgetary practice.
