This section deals with borrowings. With regard to the borrowings of the ACC, has the board and management the right to borrow more than the limit imposed by this Bill? If it is not straight ‘A' borrowing, can it use other methods of borrowing, through bonds and so forth?
Private Members' Business. - Borrowing Powers of Certain Bodies Bill, 1996: Committee and Final Stages.
Section 1 and 2 agreed to.
SECTION 3.
Question proposed: "That section 3 stand part of the Bill".
The answer to both questions is no.
Question put and agreed to.
Sections 4 to 6, inclusive, agreed to.
SECTION 7.
Question proposed: "That section 7 stand part of the Bill."
This section refers to foreign borrowings. This is a dangerour area. I am aware that foreign currencies are relatively cheap at present and there are no uncertainties in many of the more stable economies. However, there will be difficult days again. Is there a ceiling on the level of foreign borrowings undertaken by the ACC? In the past such borrowings proved very expensive. We are approaching the establishment of a single currency and that will change matters. However, before that day arrives there could be hiccups in the economies of some European countries from which we have previously borrowed. We have borrowed Japanese yen and German marks, both of which have proved to be expensive because of the strength of our economy. There have been exchange losses and there are always exchange risks. Who will carry the exchange loss or risk in the case of foreign borrowings and is there a ceiling on the level of foreign borrowings that can be undertaken by the ACC?
This evening we will raise the borrowing limit of the ACC to £2.4 billion. The proportion of that which can consist of foreign borrowings will be determined by the Minister. That is the procedure.
What obligation will be on the board and management of the ACC Bank to inform the Minister of its level of foreign borrowing? The history of such borrowings has not been good.
They cannot borrow without the Minister's consent.
Question put and agreed to.
Sections 8 to 12, inclusive, agreed to.
Before the Title is agreed, I thank Members, you, Sir, the staff of the House and those of the Department of Finance for their cooperation.
Title agreed to.
Bill reported without amendment.
We proceed to Report Stage in accordance with the Order of the House of today. Since there are no amendments on Report, we proceed to Fifth Stage.
Question proposed: "That the Bill do now pass".
The National Treasury Management Agency is a very efficient body. It is important to point out that it was established by the 1987 Fianna Fáil Government led by former Deputy, Charles J. Haughey, and has proved a very valuable mechanism in directing State borrowing. If the Minister of State is allowed to respond, will she inform the House of the implications of the provisions of this Bill on that agency? In addition, will she say whether it has any influence over semi-State bodies who borrow in foreign currency and on the domestic market? Since it has proved a very efficient vehicle with regard to State borrowings, if it does not have influence over those semi-State bodies, it should be in a position to deal with them bearing in mind that, over the years, that sector has become a high risk involving, as it does, huge borrowings.
We saw what happened in the case of Irish Shipping Limited which was established before the National Treasury Management Agency, on whose success all financial commentators have commented. While it took some time to get off the ground, those who established it are worthy of commendation. Its chief executive is Mr. Somers. Indeed people like Mr. Dermot Desmond, much maligned in this House in the 1988-89 period and thereafter, was the brains behind many successful ventures, of which this agency is one, a vehicle which has led to very favourable State borrowings at cheap rates thus relieving our overall national debt, justifying its role within the semi-State sector and its borrowings.
While this Bill is of a technical, complex nature, in the not too distant future some Members may well be discussing another Bill of a technical nature. I should be grateful if the Minister will respond to the points I have made.
This Bill will not affect the relationship of the National Treasury Management Agency or any of our semi-State bodies. One of the functions exercised by the Minister is the co-ordination of the borrowing activities of the State on which he regularly consults the National Treasury Management Agency. It should be noted that the Minister is not precluded from further consulting the NTMA and this Bill will not change those powers. The agency already has a role in advising the Minister in relation to the debt of semi-State bodies, specifically provided in the National Treasury Management Act of 1990. I concur with Deputy Ned O'Keeffe's complimentary remarks in regard to that agency.
Question put and agreed to.