Vol. 424 No. 9
53 Mr. Barry asked the Minister for Finance the Government's policy regarding privatisation of semi-State companies; if there is a Government policy concerning the use of funds from those sales; the companies, if any, which the Government has decided will be privatised within the next 12 months; and if he will make a statement on the matter.
The Government's policy on this matter is set out in the Programme for Economic and Social Progress. The Programme for Economic and Social Progress clearly states, as does the Programme for Government, that no change will take place in the ownership structure of any State company unless it is in the public interest and in the best interests of the company and its employees and following consultation with the social partners. That remains the position.
As regards the use of funds from sale of shares in State assets, the Government's policy is to use these proceeds to reduce borrowing and thus help to ease the burden of the national debt and of debt-servicing costs. In accordance with that principle, and in line with the accounting practice which has now become well established, receipts of this nature will continue to be treated as "Exchequer Capital Receipts".
Under this accounting treatment, such receipts enter the calculation of the Exchequer Borrowing Requirement but would not directly subvent current spending or the current budget deficit. There would of course be an indirect effect on current spending, in that the application of the proceeds to reduce borrowing would obviously reduce subsequent servicing costs, which are classified on the expenditure side of the current budget.
