John Perry
Question:107 Mr. Perry asked the Minister for Finance the way in which resources allocated to the National Transformation Fund will be treated in Government accounts. [14443/02]
Written Answers. - National Transformation Fund.
The programme for Government states:
"Where significant once-off revenues accrue to the State through, for example, the sale of State assets or the restructuring of the Central Bank, we will use these revenues to create a National Transformation Fund. This fund, which will be managed by the NTMA, will be used to finance multi-annual infrastructural development programmes."
Resources allocated to the National Transformation Fund or subsequent expenditure from the fund should not impact on the Exchequer balance. The way in which any resources allocated to the fund will be treated for general Government accounting purposes is governed by the accounting rules set out in the European System of Accounts, 1995, ESA95. EUROSTAT – the statistical office of the European Union – is the body which decides how these rules should be applied. The general Government balance or GGB represents the difference between revenue and expenditure of all Government sector bodies. The impact on the GGB of resources allocated to the fund is likely to depend on the nature and source of the resources. In general, resources gen erated through the sale of "financial assets", as defined under ESA95 rules, do not count as general Government revenue. Resources generated through the direct sale of "non-financial" assets, as defined under ESA95 rules, do count as general Government revenue.
The impact which any subsequent expenditure from the fund will have on the GGB depends on the nature of the infrastructural development involved. In general, expenditure on non-commercial infrastructural projects counts as general Government expenditure. On the other hand, expenditure on commercial projects is not expected to count as general Government expenditure.
The overall impact of the fund on the GGB will therefore depend on the mix of revenue and expenditure items going through the fund in any one year. The allocation of resources to the fund will not have any impact on the level of general Government debt except in so far as those resources would otherwise have been used to pay off the national debt.