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Dáil Éireann debate -
Thursday, 8 Mar 2012

Vol. 758 No. 3

Sale of State Assets: Statements

Since I announced the Government's plans for a programme of State assets disposal, there has been a great deal of misinformation circulating about the Government's intentions in this regard and of the impact of any such disposals.

From the outset, claims have been made that the Government would be selling off key strategic infrastructural assets in a fire sale and that what it proposed to do was not in the national interest. I have again heard the traditional criticism that the Government's proposed disposal of State assets is akin to it selling off the family silver. In reality, what family, if faced with real financial difficulties and a substantial amount of debt, would not consider drawing on whatever assets and investments it had to reduce its vulnerability. As a nation, we are in such a situation. Our outgoings continue to exceed greatly our income in the form of taxes and other revenues and, as every Member of the House is aware, we are dependent on funding from the EU-IMF to meet our day-to-day funding needs. In return, we are required to implement over a specified period a programme of fiscal reform that will bring our budget back into balance, which we will do. As part of this programme, and as already agreed by the Labour Party and Fine Gael in its negotiated programme for Government, we are also committed to reviewing our portfolio of State assets and to releasing value from some of these assets at this time of national need, but only on the basis that the State achieves fair value from any assets that are to be sold and that doing so does not damage our prospects for recovery and for future economic growth.

I have heard Deputies opposite state that the semi-State companies involved have contributed hugely to our economic development in the past. I agree that they have been significant contributors to our economic development over past decades. However, that is not a justification for refusing to review the contribution they can make now and into the future nor does it necessarily mean their continuation in State ownership represents the best way forward for them or the State. Time does not stand still and we cannot be prisoners of the past. Let us take the example of Bord Gáis. It has built up a successful electricity generation and supply business and is now a valuable asset within the State's portfolio of assets. However, from a strategic point of view, the question that must be posed is whether it is necessary or in the best interests of the State to have two significant electricity generation and supply businesses which are in competition with each other in public ownership.

Opposition Deputies have also drawn comparisons with the sale of our telecommunications network through the privatisation of Eircom. The Government is conscious of the fall-out from the Eircom experience and the programme of disposals which I announced have been carefully crafted to ensure that such dangers are avoided this time and that the mistakes made in regard to previous privatisations, which are evident to every Member of this House, are not repeated. In this regard, I have already made it crystal clear that the Government has no intention of selling off strategic infrastructural assets. We have agreed to sell BGE's energy business. Its gas transmission and distribution systems, including the two gas interconnectors, are not for sale. We have agreed to sell some of ESB's non-strategic power generation capacity in order to reduce ESB's market dominance. This is part of the strategy of keeping the ESB as a vertically integrated company in State ownership, otherwise it would be under threat. This also provides ESB with alternative generating capacity at a time of critical mass and provides for greater competition in the electricity market into the future. We have agreed to consider the sale of some of Coillte's assets. As I pointed out when I made the announcement on the sale of State assets, the decision in respect the sale of Coillte assets is different. Evaluation of decisions in this regard is ongoing. The evaluation is likely to focus primarily on the harvesting rights of Coillte forests, in other words, on the trees themselves, but the land on which the forests are grown will remain in State ownership, which is very important. Moreover, the Government is only agreeable to dispose of the State's remaining stake in Aer Lingus because the remaining 25% shareholding is no longer a strategic asset. This is because, as Deputies would admit were they being honest, it does not enable the Government to determine Aer Lingus policy on commercial decisions such as the use of the company's Heathrow slots.

Some Deputies have suggested that rather than sell off these semi-State assets, the Government should actually invest further in these assets in areas such as wind and wave energy, in which there is potential to create significant numbers of new jobs in what are described as the emerging technological areas. Other Deputies have suggested the Government should go ahead with the sales but simply should keep all of the money raised for reinvestment, rather than using any of it to reduce the overall level of debt. However, as the Deputies opposite are aware, these suggestions are not realistic. Where would the Government get the funds to invest further in these assets when it does not have access to the financial markets but is wholly reliant on the EU-IMF programme for even its current funding requirements? Moreover, I note the Government's capital plan has laid out €17 billion in capital investments. As regards the use of funds generated from the disposals, agreement has been reached after protracted negotiations with the troika that one third of the proceeds can be retained and will be available for reinvestment in the economy to help stimulate jobs and growth. This represents a significant shift in the position of the troika, the original position of which made crystal clear to the Government, from its first meetings with the former on assuming office, that all of the proceeds were to be used for debt reduction. This is what the troika requires in other programme countries such as Portugal and Greece. I am satisfied this represents a real breakthrough in the Government's negotiations with the troika and is a very satisfactory outcome for Ireland. It offers the potential for the Government to have access to €1 billion for much-needed reinvestment in the very areas pointed out by Members opposite.

In this regard, I should also mention the Government has reformed the manner in which the State, as shareholder, engages with its key semi-State companies. Last year the Government established NewERA, which is now taking a proactive role in overseeing corporate governance from a shareholder perspective of all the commercial semi-State companies in the energy area, including the ESB, EirGrid, Bord Gáis, Bord na Móna and Coillte. NewERA now advises Ministers on proposals for new capital investment by these companies, approval of borrowings, dividend policy and so on. NewERA also is working closely with the strategic investment fund and the National Pensions Reserve Fund to ensure that potential commercial investment opportunities are identified and exploited fully. Consequently, in addition to the disposal of some of the non-strategic State assets, the Government also seeks to make the best use of the remainder of the State's portfolio of assets that will remain in State ownership and this includes identifying the best opportunities for investment in these sectors.

As I stated at the outset, there has been much misinformation about the Government's asset disposal plans over recent weeks. Some of it has been ill-informed and some has been downright mischievous. In fairness, however, I must also acknowledge that I have heard some legitimate concerns being raised by Deputies opposite in respect of some of the wider implications of the proposed asset disposals and in particular, a number of Deputies have raised concerns in the context of Coillte and its forests. Fears have been raised about a potential lack of public access to the forests for walkers and for recreational purposes. Queries have been raised about whether the forests, if sold, would be replanted after the current crop is harvested. Questions have been raised about the impact of any disposal of Coillte forests in terms of the climate change agenda and the position regarding carbon credits in particular. More generally, questions have been asked about whether the Government has engaged with thestaff interests in the companies involved with regard to its plans.

I acknowledge and accept these are all genuine and real issues that must be addressed. However, I assure Members that these issues already were identified in the preliminary analysis undertaken by the Government in the form of the interdepartmental working group, which reported to Ministers in December 2011. That group considered a range of State assets identified by the Government as potential candidates for disposal, which included Coillte. I can confirm the Government is conscious of all the issues I have outlined and that they all will be taken into account before final decisions are arrived at by the Government with regard to what assets of Coillte are to be sold and the manner of the sale.

In this regard, I already have explained that the Government decision with regard to Coillte and its assets is different from that in respect of Bord Gáis and the ESB. Whereas specific decisions have been taken and announced regarding the assets that are to be disposed of in the case of the energy companies, no definitive decisions have yet been taken with regard to Coillte. The Government has agreed that Coillte is to be included in the asset disposal programme but my announcement of last month indicated the need for further consideration on how this was to be done. I already have indicated that any disposal in the case of Coillte is likely to focus primarily on the harvesting rights but that primarily is because I wanted to make it clear there would be no question of any disposal of Coillte land holding. The Government is determined this should be maintained in State ownership. As for the final decision on how best to release value from Coillte, since the Government made its announcements, a number of ideas have been presented to it, all of which are being considered. I will revert to this House with any decisions arrived at and Members can debate them again.

A working group, comprising my Department, the Department of Agriculture, Food and the Marine and NewERA, currently is considering this matter in detail. NewERA is preparing a valuation of the company and its assets and the working group will report back to Ministers by the end of March with the outcome of this assessment. Its report also will set out any policy, regulatory, legislative, corporate governance or financial issue that must be addressed to facilitate a disposal of Coillte or its assets. On completion of this report, together with similar reports also being prepared on Bord Gáis Energy and the ESB's non-strategic power generation capacity, the Government will be able to take further decisions on how best to proceed with the implementation phase of the asset disposal programme announced. I assure Members the Government will ensure that all the implications of each asset disposal will be individually and carefully considered with a view to mitigating any potential negative impacts associated with such disposals. This will include ensuring the continuity of access to the forests as a public amenity that is highly valued by the Government.

International investors are again beginning to look favourably on Ireland's long-term growth and prospects. The indications are, therefore, that there should be significant interest in investment opportunities in this State. The Government hopes and fully expects to benefit from this renewed international interest as the State assets are prepared to be brought onto the market. I am confident the Government will be able to secure good value for the assets it puts on the market.

I will conclude by noting that as I indicated previously, there will be no fire sales. If the Government is not convinced that any particular asset is achieving fair and good value for the Irish taxpayer, that asset will not be sold.

I welcome the opportunity to discuss this issue of the sale of State assets. First, I listened carefully to the Minister's contribution and acknowledge some of the points he made. However, I hope the Minister will understand me when I state I was shocked by the contents of the second paragraph of his script. I hope the Minister did not mean what he actually stated because he mentioned people referring to this issue as being akin to selling off the family silver. Immediately afterwards, he went on to ask "what family, if faced with real financial difficulties and a substantial amount of debt, would not consider" whatever assets and investments it possessed to ascertain whether it could draw on some of them to reduce its vulnerability. That means the Minister is telling families in financial difficulties that they should consider drawing on the value of their family homes to reduce their vulnerability.

Not at all. If the Deputy had a silver candelabra but his family was hungry, would he sell the candelabra or let the children go hungry?

Order, please, Minister. Deputy Sean Fleming has the floor.

At the outset I included a caveat to the effect that I hoped the Minister did not mean what he had said. I do not believe he meant what he said when he used the term "whatever assets". The main asset most people possess is their family home. In his opening remarks, the Minister appears to be informing families with a substantial amount of debt that they should consider realising money in respect of whatever assets they possess.

I was referring to the family silver. That was the term I used. The Deputy should not be seeking to misinterpret what I said.

I sat and listened-----

And jumped to your own conclusion.

It is a conclusion which can be drawn from what the Minister said. I prefaced my remarks by stating I hoped the Minister did not mean what he said. However, the words to which I refer are those which he used. We will move on.

It has been pointed out previously that many semi-State companies have been set up since the foundation of the State. These companies contributed to the economy and created employment. A number of them - ICC Bank, ACC Bank, the ferry company etc. - were sold over time. The Irish people have, therefore, been involved in the establishment of semi-State companies and - this is part of the normal commercial life-cycle of businesses - the sale of some of them to finance other projects. It is important to place on record that this is not the first occasion on which sales of this nature have occurred. There are some who will refer to the family silver. I did not go down that route but I was concerned with regard to wider implications of what the Minister said.

We are being forced to sell them on this occasion.

I wish to comment on the position of Bord Gáis, ESB, Coillte and Aer Lingus. We all agree there can be no sell-off of strategic State assets. The Minister has used the word "strategic" in several speeches without ever explaining what it means. I would like him to indicate as soon as possible what he means when he refers to "strategic State assets".

On previous occasions I have made suggestions in respect of some of the ESB's plants, particularly those connected to hydroelectric dams. I refer, for example, to the dams at Ardnacrusha and Inniscarra, which is situated on the River Lee. It cannot be the case that a private company might own and control these installations and, by definition, could control the water levels in the rivers on which they are located. It would not be acceptable if such a company, in order to generate electricity or for some other purpose, opened these dams and caused severe flooding downstream. Clarifying the position in respect of matters of this nature should not prove to be too difficult. The Minister may have other strategic power plants in mind in this regard and it is important, therefore, that information regarding his intentions should be placed on the record as soon as possible.

I agree with the Minister's comments in respect of Coillte. A number of Members on this side of the House previously referred to issues such as continued access to Coillte land. I refer, for example, to a situation where the company would retain the freehold in respect of a plot of land but where it sold the leasehold relating to that land to another company or person for a period of ten, 20 or 30 years. In such circumstances, whoever held the leasehold would effectively be in situ and in control of the property and this could prevent the attendant forestry from being used for leisure and tourism purposes. There would be a need to cut down some of the trees on such land during the period of the leasehold. Will there be a commitment in respect of replanting during this period?

On the previous occasion on which we discussed this matter, I referred to the carbon credits relating to our forests. These are extremely important because they are of great assistance in the context of the climate change agenda. Perhaps the Minister might indicate the overall value of the carbon credits which Coillte currently holds on behalf of the State and then the approximate value per hectare of these.

The Minister indicated that he is considering a number of options with regard to Coillte. I wish to suggest one such option but I must include the caveat that it is not necessarily one which I would pursue. From a commercial point of view, most people consider trees planted in forests as being part of a 20-year crop. We know the Minister is not selling the land. Many individuals involved in forestry view their crops as a form of pension fund because they will obtain a big lump sum from these crops at some point. Would it not be possible for Coillte to retain ownership of the ownership, management and harvesting of its forestry crops while realising now what would be the value of these when eventually harvested? It could raise that money from a pension company and give the latter a right to claim the relevant funds in 20 years' time, when a particular part of a forest might be harvested or sold off. This would allow Coillte to realise the value of future crops now and it could then hand over the money obtained to the State for investment purposes and to create jobs. Perhaps the Minister might give consideration to this proposal, under which Coillte would retain control and management of its lands and forests.

We all agree that there should be no fire sale and that State assets should not be sold for a price below their economic value. In the context of raising money to facilitate job creation, I am concerned that the sale of State assets could take a couple of years to complete. The Government is not going to realise any cash in this regard during the current year and it will probably fail to do so again next year. The people who were queuing up to gain entry to the jobs fairs in Dublin and Cork in recent days will have left the country at that stage. Essentially, the Minister is saying that they should telephone us or communicate with us in three years' time via Skype and we will inform them at that point as to whether we obtained any money to create jobs in the meantime. The Minister stated he will not be rushing the process in this regard. Effectively, therefore, he is informing people that we might have something for them in a few years from now. This approach is not fair and it fails to provide hope to those people who are seeking an early indication with regard to what is going to happen.

The Minister is well aware that I object to any of the proceeds from the sale of State assets being used to pay down debt. Such proceeds as accrue should be used entirely for the purposes of job creation. The Minister and I have different views on this matter. He has stated that the troika has given us a concession by allowing us to use one third of the proceeds towards job creation. I am of the view that the Government is being submissive in the context of handing over two thirds of whatever amount is realised to the troika. It is important that all of this money should be used to generate growth, employment and economic activity because the latter offer the best avenues towards securing our future.

The Government's track record on job creation is extremely poor. Figures which emerged during the past year bear this out. The Government introduced a jobs initiative last year and this involved raiding private pension funds to obtain €2 billion for the period up to 2014. The majority of the funds raised under this scheme were supposed to be spent on job creation last year. This did not happen, however, and the moneys in question were carried over in order to bolster the Government's coffers. I am concerned that the Government will do with the proceeds from the sale of State assets what it did with the money it obtained by raiding private pension funds last year, namely, subsume them into general funds and use them to reduce the budget deficit. This is what happened in respect of the jobs initiative.

I have proof in this regard. On Tuesday last, the Minister for Transport, Tourism and Sport, Deputy Varadkar, when addressing delegates at the annual conference of the Irish Hotels Federation, referred to the reduction in VAT from 13.5% to 9% in July 2011 as part of the Government's jobs initiative and stated that this had cost the Exchequer €110 million to €130 million a year. He indicated that this "is a lot of money". The Minister then stated that the Government will be obliged to consider whether to extend this measure, which is only due to remain in place until the end of July, for another year. He indicated "That has to be worked out in the context of the next budget as to whether we have that kind of space". The Minister for Transport, Tourism and Sport let the cat out of the bag by stating the money taken from private pension funds, which certain individuals stated in the House last year would be used for job creation purposes, will be considered in the context of next year's budget. In other words, the Minister has indicated that the jobs initiative was put in place in a budgetary rather than a job creation context. I am concerned that any proceeds realised from the sale of State assets would merely be subsumed into general Government funds and put towards balancing the budget rather than being used to promote growth.

Reference has been made to a figure of €3 billion. I do not know from where this came but the Minister indicated that the NTMA supplied it. The figure has not been verified. On the previous occasion on which we discussed this matter the Minister stated it cannot be verified until we go to the market. The figure of €3 billion may be correct or it may be wrong. No one really knows and we will be obliged to wait and see.

The term I used was that it would be "up to" €3 billion.

From my understanding, the troika will have first call in respect of its share of the proceeds. Perhaps the Minister will clarify the position in this regard but he appears to be nodding his head. People seem to have obtained the impression that the first moneys realised from the sale of State assets will go to the troika and that if the entire €3 billion accrues, €1 billion can be used by the Government for its own purposes.

I hope that is not the case and the Minister will act.

This is part of the privatisation policy which has always been pursued by Fine Gael when it is part of Government. There is a market and the general mass of Fine Gael supporters agree with wholesale privatisation. The party wanted a celebration today for its first year in office and it has got Labour Ministers, including Deputies Howlin and Rabbitte, to speak in here about the sale of ESB, Coillte and Bord Gáis assets, as well as the remaining shares in Aer Lingus. It was quite a victory for the Fine Gael Party, although one can understand that it is galling to Labour Party supporters to see a triumphant march today, celebrating the capitulation of the Labour Party to Fine Gael policy. The Minister, Deputy Rabbitte, called it a silly exercise and the Taoiseach, Deputy Enda Kenny, probably understands the sensitivities of the Labour Party supporters, knowing how deeply upset many could be because they are employees in the semi-State companies. They would have voted for Labour to protect their jobs and not to join a Fine Gael agenda to sell off these assets. It is important for the matter to be clarified.

We want to see an analysis of how this will work out for consumers, staff and the taxpayer. There would have to be detailed discussions with the staff. This morning the Minister for Finance, effectively the sole shareholder in Allied Irish Banks, saw an announcement of 2,500 job losses on top of the 750 losses already announced in Bank of Ireland, as well as other losses in Aviva and Ulster Bank.

The Deputy has a brass neck saying such things after his party bankrupted the country.

That means the Minister will have seen 5,000 job losses in the financial services sector despite the party coming here to talk about job creation. The people will know.

We are cleaning up Fianna Fáil's mess.

In other words, the bad news is our fault and the good news is the Government's doing.

It is a Fianna Fáil mess. Its fingerprints are all over-----

The Government is in office a year and has got 12 months from that story.

-----the destruction in this country.

It is starting to wear thin.

Fianna Fáil destroyed the economy and we are cleaning up the mess.

We understand that for a period after an election all the bad news would be our fault and the good news is the doing of the Government.

It is denial on the Deputy's part.

The public is beginning to tire of it.

It is year zero politics.

Believe it or not-----

The fingerprints are there.

-----the Government has been in office for 12 months, although the Deputy does not seem to realise it.

That is 12 months after Fianna Fáil was there for 15 years of destruction.

The Deputy cannot continue to blame-----

The fingerprints are all over the scene.

-----a previous Government or the Opposition for-----

-----for a lack in the current Government.

The Deputy's party has run people-----

Some 12 months on the Deputy is continuing to say it.

-----out of the country.

There should only be one voice.

Believe it or not, the Irish people are tiring of that old tune.

The Deputy's party got the message.

The Deputy can blame us all he likes but somewhere along the line the penny must drop that the Government has been in office for 12 months. It should take responsibility.

Apologise to those people in AIB.

You can continue to blame other people for the Labour Party's actions. I understand it was anxious to get into government.

We were anxious to fix the country.

You sold your principles on State assets.

Comments should be directed through the Chair.

I will be finishing soon. The Government must consult the staff. I do not know anywhere in the world where the sale of State assets, particularly in electricity generation, has reduced prices for the consumer or been a major benefit to the taxpayer. The Minister must come forward with that information. After 12 months, it is time for the Government to accept responsibility for its decisions. It will not get another 12 months out of blaming the Opposition.

I wish to share time with Deputies Stanley and Healy-Rae.

Is that agreed? Agreed.

The Government's progress report, published yesterday, is interesting for many reasons, and whoever wrote it ought to be congratulated on his or her skill. It has made out that U-turns and reneging on promises equate to some kind of achievements.

Who wrote the Deputy's speech?

A similar spin has been applied to the issue discussed today, the sale of State assets. We have been told that the Government has now agreed the shape and scale of the asset disposal programme, which is now set at the more ambitious target of €3 billion. It can be recalled that the programme for Government set a limit of €2 billion on the value of the sell-off. In itself, that flew in the face of commitments given by the Labour Party during the election to oppose any such a move. The party's election manifesto clearly stated that "Labour is opposed to short-termist privatisation of key State assets, such as Coillte or the energy networks." Now, not only do we have a Labour Minister, Deputy Howlin, in charge of the sale but we are also being told that even the compromise agreed, that the original €2 billion would all be reinvested in public job creation programmes, has been abandoned. Now we are told that the Government has secured agreement that a third of those proceeds will go to reinvestment in the economy.

What we now have in place of the original proposal to sell off €2 billion of valuable State assets built up over a long and hard period is a new proposal that €3 billion of assets will be sold and that €2 billion of the proceeds will go not towards any programme to create employment but into the black hole of the bank debt. That is a major escalation of both the scale of the sale and a major reversal of the stated policy on what the proceeds would be used for. Nevertheless, in a reply to questions from me and Deputy Browne on this last week, the Minister claimed that all of this, resulting from consultations with the troika, represented a remarkable advance.

How is it a remarkable advance, even if it were the case that the privatisation agenda was being exclusively driven by the troika, something I do not accept is the case given that clearly there are ideological supporters of privatisation within the Cabinet and the author of the report on State assets, Professor McCarthy, makes no secret of his hostility to public investment of almost any sort other than paying him and his chums large consultancy fees? Even if all of this was done at the behest of the troika, it would still represent a significant climbdown on the part of the Government. It is not an advance but another retreat to go along with all the others which are dressed up as something else in the progress report.

To see what the sale will mean, we can look at what happened when Eircom was privatised. That company had received significant inputs of State investment and was worth €8.4 billion at the time it was sold off. Following its stripping by the vultures, it has been reduced to a current net value of just €39 million. That is what will happen to Bord Gáis and to any other State company that is broken up and sold. They will be cherry-picked and the State will be left not only with a loss in having divested itself of profitable parts for a once-off payment but also with the responsibility for the maintenance of the infrastructure, for example, the Bord Gáis network having to supply gas which will be sold by private companies that will buy the gas supply section of the company.

The short-term outlook of the sale of State assets and the long-term loss it will represent is starkly illustrated by the fact that three of the key targets of privatisation - Coillte, the ESB and Bord Gáis - have paid just under €2 billion to the State in dividends alone over the past ten years. That is apart altogether from wages, tax and their overall contribution to the wider economy. The logical and economically positive action would be to retain these wholly in State ownership and develop them as key parts of a programme of publicly led job creation. There is vast potential in all three companies in areas of the economy that will become ever more important over the next decade.

It is nonsensical to be selling off key players in the energy sector when the emphasis of State energy policy is on decreasing our dependency on imported fossil fuels and replacing them with renewable sources of power such as wind, wave, biomass and tidal energy. That is why Sinn Féin is proposing the coming together of State companies to maximise the potential for growth in those areas with the emphasis on job creation, in co-operation with the private sector but with the State energy companies, as well as Coillte and Bord na Móna, as central and more proactive agents.

With Coillte specifically, it is worth pointing out again the potential which the forestry sector has if it could be better managed, which I acknowledge has not been the case. However, that is not a reason or an excuse for it to be broken up and its forestry sold to private companies. The Swiss example was highlighted last week as a potential model. Switzerland has approximately twice the amount of forestry of this State but employs 120,000 people directly and indirectly compared with less than a fifth of that number here. The Swiss state is a key actor and owns over 70% of the forestry. It is clear there is massive potential given the right policies and focus. Among the potential areas is the use as input for biomass of wood products which are not otherwise used in timber production.

We also know that privatisation is not only economically a bad idea but also that large-scale privatisation of the sort being proposed here leads to political and financial corruption. We have seen that in the creation of the new oligarchies in Russia, for example, where former devotees of the same ideology once espoused by some of the Labour Party Members used their positions within the Stalinist state to move in on valuable assets. It seems the oligarchs are now well set to meld robber capitalism with undemocratic Stalinist politics, something that might ring a bell with some of the backbenchers in the party of the Tánaiste and the Minister in the light of their own dissatisfaction.

We do not have quite the same dynamic here. What we do have is a former Taoiseach who has been prominently connected with a group which has previously expressed an interest in acquiring Coillte's forestry assets. He also visited China, apparently in pursuit of possible investors in such a project. The Chinese state investment corporation has expressed interest in Irish forestry assets. It will be interesting to see who will be the bidders when Coillte comes up for auction. It will also be interesting to see if we will again be subject to the type of shady dealings which attended previous privatisations, as it seems they closely complement one another.

The previous position of the Labour Party, when in opposition, on the sale of State assets was one I applauded. However, the impact in going down the road it is taking in selling off State assets will be felt by the people for a very long time; it will do enormous damage to our control of the public sector.

I thank Deputy Martin Ferris and Sinn Féin for sharing time. I wish to use mine to highlight what happened in the past in the sale of State assets. The old Posts and Telegraph service which provided our telecommunications services was dead in the water. In 1983 when it was turned into a semi-State company, it improved in leaps and bounds as Telecom Éireann. The service was upgraded and Telecom Éireann workers worked on contracts in England and other parts of Europe. We finished up debt free and with one of the best networks in the world. The Government's coffers were receiving money from the semi-State company and the surplus was being used to fund upgrading. However, it was then sold.

The Deputy's father supported it.

I did not interrupt the Minister. My time is short and I would be very grateful if he showed some consideration.

Is it not true that the Deputy's father supported it?

Deputy Michael Healy-Rae has only one minute.

The Minister should be fair. If he wants to draw me onto him, that is fine.

The Minister should not bully his way around the House and eat up my time.

Did the Deputy's father not support it?

I want my time back because of the Minister's bad manners. If he kept his mouth shut, he would be far better off.

Did the Deputy's father support it?

Is it a policy of Ministers to make me cross?

Is this the truth?

Is that what the Minister is at?

The Deputy has the floor.

We need another suspension.

Where are we after the company was sold? We are €3.7 billion in debt with a Third World service. I will give an example of what this means.

It was a shocking decision.

More than 100 customers in the Mastergeehy valley in Dromid cannot receive a proper service because of outdated equipment. In 1983 and 1984 equipment was provided for a period of six years. In 2012 the same equipment remains in the valley and there is a completely unreliable service as a result. Because of the transatlantic cable, Valentia Island was known throughout the world for telecommunications. However, when I sought to secure the provision of a broadband connection there, I was told by the company that 300 customers would not make it viable to provide a service.

My point is that when semi-State companies are taken over and plundered by profiteers who send their money to Australia, we are left with nothing, as is clearly evident if one travels the countryside. Poles are falling down and wires are hanging down. The Minister can laugh, but is he blind? Can he not see it is wrong?

I agree with the Deputy that it was a shocking decision.

Now he promotes that we do the same.

I must ask the Deputy to conclude.

The Deputy's father was wrong.

The Minister is saying we should do the same. If people made a mistake in the past, the Minister's answer is to copy them.

I will explain it to the Deputy.

I thank Deputy Martin Ferris and Sinn Féin.

The context of this discussion is the increase of 8% in the latest long-term unemployment figures. This is a major concern. More than 60% of the unemployed in the State have been out of work for more than one year. The sad and sorry fact is that the policies of this and previous Government have failed utterly. This is compounded by the thousands of people who see no future here and are being forced to emigrate. The weekend saw scenes reminiscent of the worst days of the 1980s with thousands queuing at the RDS for an opportunity to work abroad.

The Fianna Fáil Ard-Fheis.

Tens of thousands languish in the dole queues, but the Government will commit economic treachery by handing over €3.1 billion to unsecured bondholders in 23 days time. At the same time, it is selling off State assets worth €3 billion.

It is a promissory note, not bondholders.

The contradiction is glaringly obvious. This money should not be given away to the gamblers of capitalism but instead should be invested in job creatin. The three companies up for sale, namely, Coillte, the ESB and Bord Gáis, paid a total of €1.97 billion to the State in dividends in the past ten years. If the Government has its way, we will no longer receive these dividends. The decision to hand over €3.1 billion, while selling off State assets worth €3 billion is one the Government did not have to make. Let us be clear: we would not make this choice.

Our proposals are simple, clear and focused on benefiting the country and its people. We would use the €3 billion not for lining pockets but for a job creation plan which would include the provision of creches, 100 new school buildings, the refurbishment of other school buildings, regeneration projects in Limerick and Dublin and a range of other projects such as health centres which the Government wants to put in place. This is an opportunity to do so.

Sinn Féin believes the Government is making the wrong decision. This is not to have a go at the Government; we believe this sincerely. The Government's plan to dispose of State assets in the next two years includes the possible sale of the assets of Coillte. The Woodland League calls for an urgent re-evaluation of the State forestry model as part of a national public works programme, involving training for the unemployed and the creation of long-term forestry jobs as the backbone of national recovery. The Government should consider the merits of these proposals which could help to stimulate employment. Using public resources and taxpayers' money, over many years Ireland's public forests were built as a national asset and it makes no sense to sell off parts of them.

The Irish Congress of Trade Unions is on record as stating the sale of State assets threatens to transform companies such as the ESB and Bord Gáis into another Eircom. We know what happened in that case. The Government is being disingenuous when it states it does not intend to sell off strategic assets because the ESB, Bord Gáis and Coillte are the most valuable assets we own. If job creation is the single most important goal of this Administration, the sale of State assets contradicts this aim. It is important that semi-State companies are left in a position where they can advance, develop and be used for job creation purposes.

The Minister and previous Government speakers have stated only power generation facilities will be sold. This is the same as saying only the source of water would be sold. The pipes and wires are used for connection; that is all they do. The money is in the generation. The valve to turn on and off the power will be in private hands. The Minister understands this because he is in government and has been a Member of the House for longer. He is handing over the lever of power and putting it in the control of private individuals. I appeal to him and the Government to think about this again. Do not sell our State assets. Do not hand over these public assets or the sum of €3.1 billion.

I call Deputy Stephen Donnelly who is sharing time with three colleagues.

As I have only four minutes, I wish to speak specifically about Coillte. I listened to the Minister's statement with great interest. While I accept no decision has yet been made, it seems the ground is being set for a sale of the logging and timber rights. I understand the reason for the sale of State assets in these difficult times and how the money raised from their sale could potentially be used to reinvest to create jobs. I do not have time to discuss the economic reasons for selling logging rights, but I will discuss another aspect of the issue, one to which the Minister did not refer. Last night it was made clear to the House how important access to turf was for hundreds of thousands of people in the midlands. As a Wexford man, the Minister knows County Wicklow well and I have no doubt he drives up and down the M11 several times a week.

I drove up and down the N11 before the M11 was built.

I grew up walking in the forests of County Wicklow and still walk in them with my two sons most weekends. People in the county have an emotional attachment to its forests and mountains. It is an attachment with which I empathised last night when I listened to the debate on turf cutting. Not only does access to the forests matter to people in County Wicklow, so too does the fact that we own them. We do not differentiate between the land and the trees. It matters to us that while the land will continue to belong to us, the trees will belong to a logging company. The Minister may frown and perhaps he does not feel the same way as we do, but, as someone who grew up in County Wicklow, I assure him that based on the number who are contacting me with queries about his proposals, ownership of our forests matters.

I have met the Coillte management team, as I am sure the Minister has, and it appears to be doing a good job. There seem to be important synergies between the various elements of its operations. Having walked the mountains of County Wicklow for decades, I know the company's investment in recreational amenities is making a difference. We have, for instance, new cycle routes and many other positive developments are taking place. While I accept the Government will do its best to try to maintain access to our forests, its efforts will not succeed. We have seen what logging companies do all over the world. The Minister for Agriculture, Food and the Marine, Deputy Simon Coveney, referred to selling the rights to the forests for 90 years. The companies in question will find excuses and reasons to shut down access and decline to invest as much in our forests as Coillte did.

As a representative of County Wicklow, I implore the Minister to bear in mind that ownership of our trees and access to our forests matter a great deal to people in my county. I ask him to consider that, in addition to their economic value, our forests have an intrinsic value and should be maintained in public ownership.

The Labour Party should be ashamed of itself for contemplating a sale or part sale of State assets. To sell such assets would be a wanton and criminal act. The view of people on the street is that our assets are not the Government's to sell. The feedback the United Left Alliance is receiving is that people are angry that the Labour Party is even contemplating the part sale of State assets.

Selling off State assets to pay off banking debts is not acceptable. It is a national scandal to propose selling off part of the public companies which have been built up over many decades. Their sale would amount to a waste of money as the proceeds would be largely used to pay off the gambling debts of those who gambled in the economy. Even if €1 billion or one third of the expected proceeds was invested in job creation initiatives, it would be a drop in the ocean in tackling the problem of there being 450,000 people on the dole.

The proposed sale of State assets marks the beginning of loosening State control of key infrastructure which is essential to the economic development of the country. Did we not learn lessons from the sale of Telecom Éireann which later became Eircom? The Minister for Communications, Energy and Natural Resources, Deputy Pat Rabbitte, stated the proceeds from the proposed privatisation would be used to deliver broadband services nationwide. If Eircom was in State hands, the Government could take a strategic decision to use public infrastructure to roll out broadband nationwide. This is no longer possible, however, because of the madness of a Fianna Fáil-led Government which decided to sell our telecommunications infrastructure.

Key industries should be used for the purposes of national public job investment. Private owners are interested only in investments that make profits rather than balanced development across the country. We will potentially lose control of where development takes place.

On the decision to sell trees to logging companies, what is preventing us from establishing a State-run timber processing industry using timber from Coillte lands? The vast majority of timber is imported. Rather than developing this indigenous industry, our timber resources will be given to outside industries and used to generate profits for their shareholders. These resources should be used to help to tackle mass unemployment.

The United Left Alliance has consistently argued that money is available and has submitted its economic proposals to the Government. A tax on wealth and the assets of the super-rich could generate revenue of almost €10 billion, while an increase in tax rates for high earners could potentially generate additional income of €5 billion per annum. This income could be used to invest in job creation. In the past the Labour Party would have advocated job creation measures based on this type of investment. Instead, it is turning its head and disgracefully playing a role in the sale of State assets.

The sale of State assets has been likened in many circles to the sale of the family silverware. It more closely equates to selling off the kitchen. State assets can be used as the driving force for the economy and must be maintained in State ownership. This is at the crux of the issue. The Government's agenda on the sale of State assets is being driven by the Fine Gael Party. The Labour Party has done a U-turn on the issue. It is interesting to note, however, that the process is being driven by a Labour Party Minister who is pursuing the policies the Fine Gael Party insisted on having inserted in the programme for Government. In its election manifesto the Labour Party stated:

Labour is committed to the concept of public enterprise, and is determined to ensure that semi-state companies play a full role in the recovery of the Irish economy. Labour is opposed to the short-termist privatisation of key state assets, such as Coillte or the energy networks.

Despite these commitments, we have short-termist proposals to privatise State assets for short-term gain. If the full value of the assets in question was realised, the national debt would be reduced by 1% and if we were lucky, we would be able to provide €1 billion for labour market stimulation measures. We would have great difficulty in realising the full value or achieving the €1 billion figure.

Recent privatisations have been disastrous. When we sold off Telecom Éireann in the late 1990s, the quality of our telecommunications infrastructure collapsed. Another Labour Party Minister recently concluded a broadband review in his Department and we will probably be given a mishmash of proposals in the coming months on how to roll out next generation broadband nationwide. We had an asset in our control which could have been used as a vehicle for achieving this objective and driving economic regeneration across the county by providing fibre broadband in every area.

We are told the sale of Coillte will not entail selling off land. That is hardly a big deal, given that it is proposed to sell the rights to land held by Coillte for 90 years, effectively ceding ownership of it to whoever purchases the rights. When I was a member of a local authority, a 99 year lease implied full ownership for the person who acquired the lease. We are handing over control and ownership of our forests which should be a vital national resource. In the years ahead our wood biomass resource should be a crucial element in efforts to develop alternative energy sources and industries. Instead, it will be handed over to private sector interests and profit takers who will use it for their own ends, thus removing its benefits from citizens.

We should retain ownership of public enterprises. There are many models worldwide of public utilities working for the benefit of the public rather than private sector interests. We should use public utilities to drive forward the economy and develop new industries such as wave power, offshore wind and wood biomass projects. These are the areas we should target for future economic regeneration.

The Government's proposal to sell off State assets and natural resources is the ultimate betrayal of the country and its citizens' economic future and heritage to protect the interests of bankers and speculators. It amounts to robbing the country and its citizens of the national resources and means through which we could have an opportunity to work our way towards economic recovery and resolving the unemployment crisis. It is laughable in the extreme that the Government has made a distinction between, for example, power generation as non-strategic and distribution and transmission as strategic.

That is what the rest of the world does.

How much more strategic does it get than the ability of the State to produce its own energy? It does not get more fundamental than that. If we do not have energy, we have nothing. To say giving that away does not represent a giveaway of a vital strategic asset is beyond belief.

I would like, however, to focus on forests. Like Deputy Donnelly, I was brought up in Dún Laoghaire and Wicklow is the back garden amenity of the people of the area. We have walked in the forests since I was young. I also spent many summers walking through forests in County Kerry. It is again laughable in the extreme to draw a distinction between selling forests and somehow retaining ownership of the land. If a private company gets hold of the forests, it will control and manage them and any guarantees or safeguards the Minister promises regarding the maintenance of public access will be worthless because once the lease is handed over, the private companies will have control and we will be on a slippery slope.

We were on a slippery slope even under semi-State management. For example, 70% of Coillte's profits, even under State ownership over the past ten years, were generated through the sale of lands. How much more pressure will there be when a private company is managing our forests and approaches the Government to sell off more State land to make profits? Given it is almost certain Ireland will be forced into a second bailout, how much more pressure will there be on the Government to sell the land then as well? That is what happened in Greece. As part of the first bailout, some privatisations were agreed but, as part of the second bailout, the demand for privatisation was ratcheted up and the Greeks were told by EU representatives to sell beaches and islands. That is the slippery slope the Government is going down.

It is worrying that Coillte was set up by the former Taoiseach, Bertie Ahern when he was Minister for Finance. Coillte was managed by the Department of Finance in its early years when it began to sell off forests. Contrary to what Deputy Donnelly said, major questions and investigations are needed into the failure of Coillte to utilise the 1.1 million hectares under its stewardship, given it made almost no money other than through selling off land and forests. A company headed up by none other than Bertie Ahern would be one of the major bidders for Coillte if it went on the market.

It is shameful that the Government would consider selling off 7% of our landmass and I appeal to everybody who loves our forests to fight and to get out on the streets to prevent the Government from selling off our national heritage and assets which could resolve the unemployment crisis.

I wish to share time with Deputy Anthony Lawlor.

I am grateful for the opportunity to contribute. This is an emotive debate because we are discussing the fallout from an agreement made with the troika in November 2010, which came like a financial tsunami at the country. The ECB woke up to the fright that it had an exposure of €135 billion in loans to our banking system and, in turn, to our economy and there was a deficit in the public finances of approximately €20 billion a year. The improbability of getting the €135 billion back when the Government faced an annual deficit of €20 billion was alarming. The memorandum of understanding was cobbled together by the IMF, the EU and the ECB in emergency mode and this coincided with the financial crisis that was about to explode on the eurozone and the world. That was the confluence of events that led us to the memorandum of understanding, which required us, as part of the algebra, to repay the agreement loans by realising €5 billion through the sale of investments.

I am glad the Government has renegotiated this amount down to €3 billion with a balance of €2 billion for debt repayment. The repayments relate to the debt taken on on foot of the memorandum with €1 billion to be reinvested in State enterprise. However, this is an opportunity for us to think in bigger terms and to examine the woods, not the trees of that agreement. We must consider the number of variables in the overall equation rather than concentrating separately on each of the variables and the fractions or decimal points that go with them. As a nation, we should continuously review State investments in enterprises. For example, employment should be examined in order that there is refreshed rather than stagnated employment. Are the people in those enterprises learning new skills and engaged in continual professional development, which is required in all professions nowadays? The agreement at least drives the Government parties to review our investments whether those are in Coillte, Aer Lingus, ESB or Bord Gais and that is what they are doing. Rather than squabbling about the arithmetic of the €3 billion being divided into €2 billion and €1 billion, we should have a calm, measured review of the investments. There is an opportunity to realise some of the investments and invest in fresh sectoral opportunities in the economy and that is what I advocate.

It is also useful to connect with our creditors, including the ECB, whose governing council meets today and it is hoped the Governor of our Central Bank will robustly persist about the provenance or origin of the emergency liquidity assistance in IBRC and about the ECB advances to AIB and Bank of Ireland with a view to restructuring, renegotiating and writing down those debts because only then will it be possible for the two remaining operational utility banks to pass on write downs to their customers, which are the households and businesses that are being crushed by debt that is astronomically higher than any other country in the developed world. That is the opportunity but let us take down the tone to one of measured, constructive co-operation. Let us insist to our creditors that we should sit down with them to examine this.

It is strange that we are debating the sale of State assets because the same debate is taking place in New Zealand, a country to which many of our people have emigrated. Last night, the New Zealand parliament voted in favour of selling state assets. The country has a budget deficit similar to our own of approximately NZ$18 billion. It is using the sale of state assets to reduce its budget deficit. It is fascinating to hear a debate taking place here and a measured debate taking place in New Zealand at the same time. I note the debate taking place in New Zealand is measured whereas here we are getting a rant, by which I mean that people pick up certain words within the debate and the legislation and on the sale of State assets and use it. Every speaker on the Opposition mentioned Eircom. Eircom was sold in its entirety. If we had held on to the strategic part of Eircom, that is the cabling and wiring, we would not have a debate in which Eircom would be mentioned.

No, we would not because we would have realised that part of the sale of Eircom would have generated the income we needed and we would have held on to the crucial part, the strategic part. I often wonder if people listen to what we say. We are not selling the strategic part of the assets put up for sale. We are selling the generating part, yet we are maintaining the wires and cabling. We are not selling the land associated with Coillte as my learned colleague, Deputy Boyd Barrett, said on a number of occasions. We are selling the product of the land, just like every farmer. He sells the product of his land, he does not sell the land. Will the Deputy please listen?

Who is going to manage and control it?

The most important asset in this country - nobody on the Opposition has mentioned it - is the people, our people. We have to look after our people. The most important issue for our people is to get them back to work. We will use the fund generated from the sale of some of the assets to provide facilities to generate jobs and to reduce debt. Any celebrity economist will say the reduction of debt in the long term generates more income for the country.

I welcome the sale of State assets. I stand firmly behind the Minister in the hard work ahead and look forward to debating the issue with the Opposition in a proper and controlled manner.

It is a pity the Government has not allocated a decent amount of time for the debate as one cannot discuss what is a complex issue in five minutes. The reality is that nobody in the House is against the sale of State assets because, if one takes it to an absolute ridiculous level, it would be equivalent to saying that if a State company owned a van it wished to trade in for a new van, it could not sell the old one. We know that trading of State assets takes place all the time. However, what we are talking about here is a firesale of State assets.

Deputy Boyd Barrett does not want to sell the land.

He is absolutely right about Coillte. What is being done in respect of Coillte is a disaster. There is always a movement of State assets, big and small. What is being discussed here is the sale of strategic State assets in large quantity. Two years ago the Labour Party would have thrown its hands in the air and said this was disgraceful. The Labour Party never ceases to amaze me. The Government will deny it is a firesale yet when one examines the documentation it is clear the sales will commence in 2013. As the Minister is aware the economic forecasts for 2013 are not good as there will suddenly be huge valuations on assets. What will the Government sell? I suspect it will be some generating plant. I have an open mind to see what will be put up for sale. Some has been sold in the past. We should keep some critical generation capacity. I note that Mr. Colm McCarthy said the generation capacity of certain assets should not be sold, therefore, I want to see what it is proposed to sell.

I am opposed to the sale of the retail side of Bord Gáis. If one was Minister for Social Protection one would find that the attitude taken by the State companies to ordinary people who run into problems paying their bills is much more constructive, more planned and fairer than that of the private companies. When a big hullabaloo was raised by Fine Gael and the Labour Party about electricity being cut off when I was in government, they did not realise that in a large number of these cases, a disproportionate number compared to the customer base, that it was being done at the behest of Airtricity. The physical cutting off was done by Electric Ireland, but the demand to do it arose from the non-payment of Airtricity bills. Before selling State assets it is important to consider what is being done.

The amount to be generated from the sale of State assets is a projected €2 billion. Some €1 billion worth of State assets is being sold because the Labour Party needed a fig leaf that it would create jobs out of the sale of State assets. When it could not the €2 billion it had promised out of the sale of State assets it said it would add another €1 billion to it and the people would not notice it. The people do notice. I wonder how much money will be got when one takes into account the pension fund deficits and calculates a multiple of the loss of the dividend. In other words, the value of an asset must be set against the income one would have earned from that asset, where one owns the asset and the income, whereas when one sells, one sells the goose that lays the golden egg, unless one gets a good multiple return.

Much play is made about the sale of Eircom. A mistake was made subsequent to the sale of Eircom in regard to the way the telecommunications sector was regulated - I am still very critical of that. The reality is that we got €6.4 billion in 1999, which is more than twice what we will get for the sale of a large number of assets.

We got €6.4 billion from willing investors who bought shares in Eircom, which in today's money would be €9 billion. That amount of money particularly for a rapidly redundant technology, that is, copper and wires, would give a significant dent in providing money for jobs. If the Minister, Deputy Rabbitte, said he was going to sell off redundant technologies and get €9 billion, €7 billion of which would go to jobs, that would be an interesting scenario. I have argued for some time that the copper wires are useless and should be replaced by fibre optic cable and the actual technology is so outdated as to be irrelevant in the modern world.

The Deputy is truly an extraordinary man.

I take that as a compliment.

I ask the Deputy to conclude his remarks.

In regard to Coillte, the problem in regard to the crop is that it will be a bad arrangement for the timber companies. I say this as one who knows something about the timber industry as I was involved in it. I can assure the Minister that those companies that have done exceptionally well, despite the downturn-----

Farmers also sell crops.

Obviously the Deputy does not understand the industry. The forestry used for rural recreation had a big investment from Coillte. Is the Deputy trying to tell me that the private owners of the crop will be as amenable as Coillte has always been in ensuring that harvesting operations do not interfere with what is a rapidly growing industry, namely rural recreation? Some 45% of the waymarked ways are on Coillte property. I ask the Minister to ask himself what does it profit a Government to sell its soul for the full world for €3 billion.

I welcome the opportunity to contribute to the debate. First, I wish to correct Deputy Matthews on one particular matter which may have slipped his mind. He referred to the agreement made by the Government with the troika in November 2010. I remind him there was no agreement to sell State assets in that agreement and there was certainly nothing relating to a sum of €5 billion; that was agreed by the current Government. There was a commitment to review State assets in so far as they might contribute to debt reduction but there was no commitment on it. Unfortunately that gets peddled around a good deal.

Correction sustained.

I thank the Deputy. I would expect nothing less.

I do not have a personal hang-up about the disposal of State assets, and I do see merit in the sale of certain non-strategic State assets to deal with the debt burden. I recognise the need to inject liquidity into the economy to assist the Government in its job creation proposals and certainly, where non-strategic State assets can be employed, that is the right thing to do. The debate then comes down to what is strategic and what is not. Deputy Lawlor talked about Eircom, for example, and the necessity of retaining the copper wire network. I am not so sure the copper wire network is really a strategic component. Rather, the strategic aspect is the back office management of customers and the capacity to develop and roll out new technologies. Sadly, Eircom became a stock-market play when the State did what other states were doing at the time, which was to leverage too heavily the capacity to generate revenue from customers, which is a far more intangible asset than copper wire. Technology has moved on and we are now looking at next-generation transmission systems.

However, my point was not about telecommunications companies. We need to look at this with our eyes wide open. Let us consider the proposal to sell Aer Lingus. In my view, the portion that is retained by the State is of strategic benefit. There are difficulties with it, it is not the golden share that some might like, but it does provide the State with at least some capacity to influence its own aviation policy. Without some influence in terms of how an airline operates, the State is not in a position to ensure its broad aviation policy is controllable. We are an island nation and depend to a huge extent on our capacity to generate inward tourism and outward business because of the level of exports we have. The Government is talking about developing an aviation policy. This was alluded to in the recently published Booz & Company report about the ownership and management of our three State airports. Regional development must be an important component of that. If we are not in a position to influence in some way the activities of one of our airlines, we will put ourselves at a major disadvantage. To me, the 25% share is strategic.

Others will ask why the Government was unable to influence the activities of Aer Lingus when it sought to move those famous Heathrow landing slots from Shannon Airport a number of years ago. The Government was left on the back foot at that time because it had not appointed its complement of directors to the board and the airline made a management decision that did not go to board level. The management decision was to move the Heathrow slots around among airports on the island of Ireland, and we know the impact that had on business and tourism in the west and mid-west. We should learn our lessons from that. The last Government certainly learned its lesson, and appointed directors. We accept that directors of a public limited company must dispose of their fiduciary duties - that is a requirement - yet they can also have a mandate to consider the broader aspects of those fiduciary duties, which would involve regional development. That was achieved, and the decisions taken in Aer Lingus thereafter about issues such as landing slot allocation had to be made at board level.

If the 25% share is sold, it is my contention that the board will not contain any directors appointed by the State. They will not have the broader remit of considering regional development, tourism or our national interest in maintaining connectivity. Their only concern will be the profitability of the company. That is why I believe the 25% shareholding in Aer Lingus is of strategic importance and should not be put up for sale. The return will be minimal when we take into account the pensions hole that will have to be dealt with as part of any sale. There will be nothing left for the Government's noble aims of reducing debt and injecting capital into job creation. I am fearful that this particular aspect of the asset disposal is short-sighted and could create difficulties for us in the long term. There is also the issue of competitiveness, which I have not had an opportunity to discuss.

I wish to share my time with Deputy Mulherin. I welcome the opportunity to speak on the proposal to sell some of the assets that the State currently enjoys. It is just gone a year since the last election, and one of the serious mandates this Government was given at the time was to sort out the mess the country was in. One could boil it down to nothing less than fixing the intolerable problems faced by this country. It is not so much an ideological issue. Although that is how some members of the Opposition have portrayed it, that is not the case. The simple fact is that for every man, woman and child in this country, we are spending €12,192 and taking in €8,312 in income. That is not sustainable and never will be, and it must be dealt with. If we look at this in terms of a householder or the treasurer of a GAA club or any other societal organisation, we can see that a decision must be made on the sale of assets, whether we call it that or call it a car-boot sale. I am pleased that the Minister has taken a pragmatic approach on what should be the sale of non-strategic State assets.

I have listened with some amazement and no little humour to Members talking about the sale of Coillte. Coillte is not for sale and its lands are not for sale. The product of the land, as Deputy Lawlor quite rightly mentioned, is on the market, but it would be on the market anyway. Trees grow and mature and then they are felled and sold. It does not matter who owns them or what they do with them, the process cannot be stopped. People have talked about the curtailment of walking rights or access to Coillte lands. When works are being carried out by Coillte, such disruptions take place in any event, and anybody who lives adjacent to Coillte lands in rural Ireland is well familiar with the consultation process. To suggest that citizens will be refused access to those lands for all eternity is quite simply ludicrous and cannot be accepted. We have a solid system of waymarked trails and rights of way, and access to those lands is enshrined in our law and will continue to be supported.

I remember, in the past, we operated a small telephone exchange in a country office. Thirty years ago, access to a telephone was a major issue, and many Deputies remember that one of the biggest vote-getters was to promise a phone to a house within two years. The system was then under public ownership, and the country invested hugely in telephone services. The Department of Post and Telegraphs became Telecom Éireann, then Eircom, and then it was lost. That was a harsh lesson for the country and for those who had invested having been told they were investing in their future. This Government will learn from those mistakes.

The proposal for the sale of non-strategic State assets that is under examination shows exactly what should have happened when Eircom came on the market. If we do not continue with deregulation and the movement of assets, things will never move on. Today it is less likely to be a question of access to telephones than to broadband connections, and ultimately we will be talking about 100 Mbps broadband connections.

There may be an issue about access to other vital State infrastructure. If State assets are retained in the comfort zone of public ownership, things will never change. Therefore, decisions must be made. Even if we were not in the midst of the current economic crisis, we would need to continue to make decisions on what was strategically vital or beneficial to the country.

There are advantages to the proposal to allow €1 billion from the proceeds of the sale of these assets to be set aside for job creation initiatives. This must be welcomed. If we do not reduce the national debt by €2 billion on foot of the sale of State assets, the money will have to come from some other sector, be it health, education or social welfare. I have not heard of a proposal from any Member as to the Votes of Departments from which the required €2 billion will come. It is unacceptable for Deputies to speak about the ideology of the sale of State assets and then return to their comfort zone and say the Government should not cut funding in this or that Department. That is simply intolerable.

The next speaker is Deputy Michelle Mulherin who will be followed by Deputy Andrew Doyle.

I welcome the opportunity to speak on this issue, one which can capture not only our imagination but also that of the public. I can well understand, based on past form and the history of the disposal of State assets, why people can have reservations about what is entailed. When we look back on the history of previous Governments which sold many State assets, it is evident that they had no plan in that they should have ring-fenced some of the moneys secured from their sale to ensure we would have had something in place today, instead of the moneys being scattered to the four winds, which appears to have happened in most instances, with the exception of the €1 billion put into the National Pension Reserve Fund.

In the case of the TSB, ACC, Eircom and Aer Lingus, shares were sold; some were sold in their entirety and at one stage the Central Bank was raided. We have also witnessed the confiscation of dormant account funds. Deputy Éamon Ó Cuív, the man who does not want to support the European stability treaty, was instrumental in using the dormant account fund as a slush fund to gain votes in previous elections. There is poor form in the sale of State assets and definitely their sale was not managed in strategically.

However, we are living in times when we have to look at things differently. We simply cannot dismiss something because we have a certain ideology and as we all know, ideologies can evolve as our understanding grows. In the times in which we are living we want to be assured good water quality from an economic and health point of view. We also want energy security, to develop our renewable resources, includindg wind and wave energy projects, and so on. We want to lead the way technologically in order to create jobs, invest in broadband infrastructure and ensure our aviation, transport and health sectors grow. We need investment in infrastructure, whether it be in the grid, broadband infrastructure or the pipes in the ground for water services to ensure people throughout the country will have access to a water supply of uniform quality. Therefore, we have to think differently. Aside from the obligations on us resulting from the IMF's presence here, we can examine investing money, as envisaged under NewERA, to create and build the kind of future we want to allow economic growth to occur.

On the sale of State assets, we need to question if what is being done in the bodies in question is working. Is it right that the ESB should have a dominant position from a power generation point of view which skews the market? Most people who have an appetite to invest here and develop our renewables are in the private sector and at times they are frustrated by the constraints imposed upon them.

With regard to Coillte, on which I had an exchange with the Minister for Communications, Energy and Natural Resources, Deputy Pat Rabbitte, yesterday, we should not only consider selling the timber rights but the right to use forestry lands. Hundreds of thousands acres are in the ownership of Coillte in remote areas that would be suited to developing wind farms. We should, therefore, examine the granting of long leases to private industry to develop wind farms on forest sites. As the State would not be involved in developing such facilities, investment capital would not be required, yet we would secure a benefit, the value of which could be released to generate job creation.

The current operations are not working right. Bord Gáis and the ESB are competing with each other in the supply of energy. Last year the Comptroller and Auditor General said that between them these two companies were spending €20 million on marketing. They control 75% of the domestic supply market. All that is happening is that a person knocks on the door of a customer of the ESB to ask him or her to sign up for a Bord Gáis package and a year or two later the ESB asks the same person to sign up for one of its packages. That is not a wise way to spend taxpayers' money. I highlight the fact that Bord Gáis has spent €2.4 million to secure the naming rights of the Grand Canal Theatre. That is not an appropriate activity for a semi-State or State body to be engaged in.

We can get the balance right, safeguard key infrastructure, allow the market to develop and give people a chance in the private sector who want to do something in this country.

The next speak is Deputy Andrew Doyle who has a minute and a half. However, I will do my best to accommodate him.

His speaking time has just been increased to two minutes.

Of all the Members who sit in the Chair, the Deputy is the most understanding when a Member seeks to make a few points.

It has often been said we should run the country more using a business model. If any business was in the same position as Ireland, it would look at its assets strategically. It would examine how it could reconfigure its assets base in order to survive. We are engaged in an critical analysis of State assets. However, we are under no obligation to sell them in a firesale. No one is saying we have to sell them tomorrow, but it has been acknowledged and conceded by those who are funding the country that one third of the receipts of the sale of State assets, whatever they might be, can be reinvested to create jobs.

As somebody said to me recently, we have many opinions but very little analysis. We need to engage in an analysis to determine what would be the best list of assets to sell and which assets are strategic and those which are non-strategic. In this context, as has been said by others, we need to consider networks as opposed to facilities, be it rail, telecommunications, energy, gas, electricity supply netowrks, etc. We saw what happened in the case of Eircom when €6.2 billion was used purely for the purpose of ensuring one political dynasty would stay in power forever. Ultimately, it did not work. We are now in a position where we are considering selling up to €3 billion worth of assets and using one third of the proceeds to strategically invest in the creation of jobs, be it through the provision of improved water and broadband infrastructure, in order that we can attract foreign investment to allow us to export goods and services.

As I live in the uplands of County Wicklow in the heart of forestry territory, I wish to make a few points about Coillte. Much of what has been discussed with regard to the sale of Bord Gáis Energy, some of the ESB power generating stations, Aer Lingus and other assets is black and white. The positon on Coillte is much more complicated. Mr. Colm McCarthy in his an bord snip report said the sale of the land should not be considered, which was welcome. There are other models, but there are also dangers inherent in every option that might be taken. Therefore, a long and deep analysis is needed. For instance, if we were to sell board mills, the chances are they would be bought by a company which was our biggest competitor in the United Kingdom purely to close them down. Jobs would be lost as a result. We have to be mindful of that. If we are not careful about how we auction the licences to fell, there is a risk that the raw materials could be diverted from the board mills.

I have been talking to people in Coillte and I understand they are on the verge of a breakthrough in creating a waterproof MDF. This is where they need to be able to get leverage investment from other countries and from outside investors. Deputy Colreavy is a colleague of mine on the agriculture committee. I hope that when representatives from Coillte come before the committee, we get that sort of information out of them and find out what they have in mind. It could be the case that we do not sell it, but that they try to leverage more money and by so doing, bring in as much money as if some of Coillte was sold or auctioned. We should look at the New Zealand Crown Forestry licensing system. It gives the country complete ownership and control, and it even controls the way the licences are auctioned.

This debate will go on. We need to be reasoned about it and we should not look for populist soundbites in respect of the whole issue.

I remind the House that we must call on the Minister at 1.25 p.m. and we have five speakers left.

Táimid glan i gcoinne sócmhainní Stáit a dhíol, is cuma cé mhéid atá i gceist. Roimh an toghchán, bhí Pairtí an Lucht Oibire go háirithe i gcoinne díola mar seo. Tá an Rialtas ag chur an locht ar an AE agus ar an IMF, agus de réir a chéile, níl an dara rogha againn. Tá rogha eile ann, agus níl sé riachtanach leanúint leis na polasaithe seo. Tá slí eile ann, agus leag Sinn Féin amach sa bhúiséad slí níos fearr gan a bheith ag díol mhaoin na ndaoine.

Recently the heads of Aer Lingus stated their concerns that any Government decision to sell off the public stake in the company would be detrimental to their business model. This model made a €71 million profit last year, which was nearly double the profit of the previous year. A 25% stake may not cream as much from that profit as the once-off pay off that we could get for selling the stake on the open market, but that is real profit accruing to the State every year. Some €71 million is a lot of profit, not to mind the taxes and incomes that are provided by this Irish company, but the Government has stated that it will wait for the best time to sell it off, or when it will be most attractive to do so. This means that Aer Lingus will be sold to make up part of the €3 billion that the Government intends to waste on repaying debt that is not ours to pay. It will be even more profitable than it is now, and will be a more juicy cherry to pick for the private business world.

The head of communications at Aer Lingus, Declan Kearney, said the following:

we would like to stress that our success is very much linked to building connectivity and partnerships with multiple airlines...Ireland is an island and we see it as our primary mission to connect Ireland with the world. If the stake is sold in a way that is offensive to any of our partners, that would damage our business model and the connectivity of the country.

What else do we get from this stake in what is seen around the world as a quality airline which is Irish through and through? I am not in the habit of quoting Michael O'Leary, but he made a good point about the future of Aer Lingus if it was sold off:

Aer Lingus will be broken up because everybody else only wants certain bits: the Heathrow slots and maybe the long-haul. Nobody wants the short-haul, because they will have to compete with Ryanair.

If we sell off Aer Lingus, we lose these slots to interests in the private market, which will do with them what they wish, with no concern for the connectivity of Ireland other than what suits their bottom line. The Minister for Transport, Tourism and Sport told The Irish Times that there was no longer any strategic value in owning the Aer Lingus stake, but when we consider “not a red cent”, “the second bailout” and other outrageous statements by the Minister, perhaps we should not give that too much consideration.

The State is not an entrepreneur or inventor which can just move on to the next project using the capital from the last sale. Our State assets like Aer Lingus, ESB, Bord Gáis and Coillte are vital to the interests of the people of this State, as was Telecom Éireann. The bottom line is that the quick sell off and the one-time pay off do nothing for us.

The ESB is a profit-making company that employs 7,000 people. In 2010, it made €340 million in profits. Bord Gáis did the same. The argument that we are only selling off non-strategic assets is the argument that led to the privatisation of companies and the loss of well-paid State jobs. There is an ideology behind selling off the State assets. There is a drive towards privatisation from this Government and we in Sinn Féin thoroughly oppose that.

I ask Deputy Colreavy to be as quick as he can so we can accommodate everybody.

I had hoped to start by commending the Government on its handling of Private Members' business last night, because I thought it would set a precedent for a more co-operative way forward. Unfortunately, that promise was dashed this morning by the expulsion of Deputy Doherty for the crime of asking a question of great public interest and concern.

The question here is not just about whether it is wise or unwise to privatise our State assets. It is also a question of the use to which the proceeds of any such sale are to be put. The Government has claimed that it will raise up to €1 billion to support job creation sometime in the future from the sale of State assets. It is ironic that the same Government will hand over €3.1 billion to unsecured bondholders at the end of the month.

In these hard economic times, the Taoiseach and his Ministers should be eagerly searching for opportunities to improve our job creation structures. However, the Government is doing the exact opposite. It is selling off State assets paid for by the taxpayer, putting people's jobs at risk, and taking a gamble on how much the sale of those assets will make. I predict that the only people who will benefit from the sale of our taxpayer-funded assets are already very wealthy people and institutions whose sole motivation is profit.

It is a pity the Government does not look towards Scandinavia to see examples of where real profitable State companies create employment and generate growth. Sweden has those examples, where the right investment and encouragement breathe life into that nation's economy. Just like Thatcher and Reagan, this Government is hell bent on ridding this country of Keynesian economic policy. There is no clearer example of this than the Government's unwavering support for the austerity treaty in the forthcoming referendum.

I hope I do not sound arrogant when I say the Taoiseach, the Government and our negotiators are suffering from a very simple but profound misunderstanding. They seem to regard the troika as a friend and partner of the Irish nation, but the troika is no friend of the Irish family. No friend would force a family to pay for debt it did not owe. No friend would force family members to emigrate to seek a living. No family friend would leave that family without hope. The troika is no friend if it insists on Irish family impoverishment to safeguard European banks.

The Taoiseach is right. We will not be bribed, but the Taoiseach, the Government and our negotiators should insist that the blackmail stops now.

I call on Deputies Spring, Maloney and Kenny. Time is limited, so I ask them to do their best.

I remind Deputy Colreavy that only a couple of minutes ago a delegation from the Swedish Parliament was here and not one member of the Opposition showed up to ask them any questions or gain an insight into how they got through their turmoil and produced a model that we all want to be-----

I just got the message - we are all right.

Deputy Ellis was not invited. None of his party or none of Fianna Fáil showed up. They should remember that.

My party did not want to be selling State assets. I make no bones about it. What we are trying to do is create jobs for the people of the country. As Deputy Doyle correctly pointed out, we are trying to stop the emigration of a generation. It is a profound mess.

On the sale of State assets, we should look at forming a way in which we would have an option to repurchase them in future. It is a time of distress for the nation. We are not as bad as the Greeks, who are selling €50 billion in state assets and who have a brief window in which to do so. I am delighted to hear there is no fixed deadline as to when we must sell these assets. If there is a possibility of selling them with an option of buying them back again, I would welcome that and I would encourage the Minister to look at that.

This is about jobs and I am happy to see that €1 billion is being pumped into this area. I would also encourage that some money from the National Pensions Reserve Fund be put into creating jobs here, especially for the younger generation.

However we are conducting this sale, we need to look at protecting those working in these institutions. That must be at the heart of every decision made.

We would not be having this debate among ourselves if the country was not in recession. Given the subject matter of this debate, the impression I got from listening to the debate earlier - in fairness, not including the contributions of those here present - was of Members working up a sweat as if all the national assets were to be sold off tomorrow in a €1 shop or some such nonsense. Very limited assets are being sold off. Let us be truthful and accurate in the debate.

This country is in a bad place and in, to use Charles Dickens' title, Hard Times. Anyone who thinks otherwise is deluding himself or herself. It is constantly repeated here, as it was this morning, the number of people, predominantly young people, leaving this country, the number of people on the dole etc. Quite correctly, that should be repeated because that is the reality, and that is why this debate is taking place. If such sales take place, part of the proceeds will be used for job creation, and why not? I support that.

I listened to some Members earlier this morning working up a sweat on the issue of the sale of State assets. These are the same Members who came in here and took up most of the time on Tuesday talking about bogs and who arrived back yesterday to talk about bogs. When thousands were standing on the road in the freezing cold at the RDS on Saturday, and again on Sunday, there was not a word from these Members who were talking about bogs. Did they pick up the Irish Examiner, page 7? With thousands of people in a car park in Cork, if we went down and canvassed them and asked, “By the way, how do you feel about selling off a limited amount of the national assets”, do they think these people would say “No”? They would, my arse. They would welcome any initiative by the Government. This is the only initiative in this regard. I have not heard any proposal from that side of the House other than, of course, the bog contribution from the highly Technical Group, who know everything and always want Members to turn up for debates but are never here when the real debate is taking place. Of course, they are qualified in bogs. I can just see them all on Mastermind on the subject of bogs.

I must call Deputy Seán Kenny. We are running short of time. The Minister will concede a minute to accommodate him.

I understand the reluctance of many about the sale of State assets. The commercial State companies have served the country well since the foundation of the State. They continue to be a core part of the economy. They are involved in delivering strategic infrastructure and key services across a number of different sectors. They have developed significant expertise, technical knowledge and skills and they have generated employment. It is for this reason I want to make it clear that the Government remains committed to ongoing State involvement in critical areas of economic development.

The Government persuaded the troika that asset disposal on the scale of €5 billion was unrealistic in the lifetime of the programme and, more importantly, that it was in the best interests of the revival of the economy that the Government be free to re-invest a significant proportion of the proceeds. Against that background, the outcome announced by my colleague, the Minister, Deputy Howlin, is welcome and is a considerable improvement. We are in a position where there is only one lender available to the Government and the Government has done exceptionally well to secure approval from the troika that one third of the proceeds will be down to the State for investment in employment.

It is far too soon for some of the celebrations that were planned. The overwhelming public interest now is to bring about sustainability to the public finances and to foster economic growth and jobs.

I call on the Minister to conclude.

I have three or four minutes to do justice to a debate. This is the second opportunity Members had to make a contribution on this and I thank everybody for their contribution.

The truth is we do not live in normal times. Listening to some of the contributions from the far side of the House, one would think these were normal times and we were not in a desperate crisis. We have taken a step back from the abyss over the past year because of concerted action by Government, but we are still far from clear of danger and we are required to make a series of decisions still which will be difficult. We should not be peddling the notion that there are soft and easy options, that we should be looking for enormous sums of money to invest in State companies rather than seeking to generate capital from State companies. Would that we had money. We are desperately seeking money.

Let me be clear about what is the strategy of the Government. First, the strategy of the Government is to focus on jobs. We need some form of stimulus to do that. We need to leverage money from the State assets to invest in the productive sector here. We need to look to other sources of income, including the National Pensions Reserve Fund, utilised through the policy of establishing a strategic investment bank, the first step of which, the Strategic Investment Fund, is up and running to invest in jobs. We also need to see how we can go about getting further supports from the pension funds. Some €70 billion of Irish workers' pension funds is invested - except for 2% in this country - all over the world and we must create vehicles for that to be brought home to be invested in the productive sector here.

All of that is under way. In the interim, we need to take difficult decisions. We need to realise that, and not peddle falsehoods, voodoo economics or Darby O'Gill economics that there is simple magic dust one can sprinkle. We changed Government last year. We did not change the economy. The Government must tackle the economic reality that faced us and we will do that.

Let me speak briefly about some of the contributions. Deputy Seán Fleming, in his usual balanced way, made some sensible, sound logical points and then could not resist having a partisan go to undo it all. In terms of this concrete proposals, he spoke of securitising future crops. That is what we are doing. That is the matter we are exploring how best to do.

On those who spoke of the forests being sold off, we are selling the trees. It was always expected we would sell the trees. When the trees mature, would they have us cut them down and present each citizen with one to put in their garden? They were always to be sold. That is not selling off the natural assets of the country. We must do that in a way that ensures we get best value now, when this country desperately needs the resources to keep the queues of which the Members opposite spoke from leaving the country. I am scandalised by such queues and I want to do everything open to me and to this Government to find a mechanism to prevent them having to take the plane or the boat out of this land. That is the number one objective of the Government.

Finally, there are some Members opposite to whom I listen regularly - Deputies Joan Collins, Boyd Barrett and Pringle among them. I think they are sincere. They believe what they say, namely, that we do not have to have real taxes so they are against collecting anything except taxes on the super-rich, whatever that means - there are billions there, if we could only tax the super-rich, but they do not want to tax anybody else or to cut expenditure. That fantasy-land is well and good for sloganising and rhetoric. We live in the real world. We have to get on with doing the people's job, giving them hope to ensure they and their children have a stake and a future in this land.