I remind Senators that on Report Stage a Senator may speak only once except the proposer of an amendment who may reply to the discussion on the amendment.
Irish Aviation Authority Bill, 1993: Report and Final Stages.
An Leas-Chathaoirleach
I move amendment No. 1:
In page 12, line 28, after "company," to insert "save in relation to charges for the use of services provided by the company,".
The purpose of this amendment is to ask the Minister to clarify something which was mentioned on Committee Stage and about which the Minister has given confusing signals. There is a minor conflict between what the Minister said and what is in the Bill and the purpose of the amendment is to clarify this conflict and enshrine it in the law.
The Minister stated on Second Stage that he can intervene and give a direction on anything. I quote from the Official Record — which is open to correction if it is wrong — column 251. I said: "The Minister has the power to intervene or to give a direction on anything. Is that correct?" The Minister replied: "That is correct". Therefore, in the Minister's words, he can intervene on any matter to do with the Bill. However, at column 249 he said: "The Minister would not be able to give directions down to minute detail."
One cannot give directions on anything and not be able to give directions down to minute detail. This must be clarified because there is a contradiction here.
I believe what the Minister means is the difference between "will" and "would", "can" and "would". The Minister continues at column 249:
The Minister is empowered to intervene. However, he would not give directives in the normal day to day running of the organisation, ........ He can issue a directive, but in the normal commercial operation and management of the Authority the Minister would not be involved in specific detail.
I wish to change that "would" to "will" or "can" to ensure that he does not intervene in the day to day activity of the Irish Aviation Authority. The only way to ensure that is to enshrine it in legislation because my understanding of what the Minister said is simple: that he can intervene but he would not. Let us make sure that he does not.
I formally second the amendment.
Perhaps I was not clear enough in my response on that occasion. I thought it would be concluded that I was referring to policy and not detail. I said we would not go into detail. It is the same situation.
Section 7 gives the Minister power to direct the company to comply with general policy decisions made by the Government in relation to aviation. The purpose of Senator Ross's amendment would be to exclude the Authority's fees and charges from the ambit of ministerial directions. However, we must be clear about this section. It does not give the Minister the power to intervene in matters of detail.
The company will not be required to have its fees and charges approved by the Minister. The main user charges imposed by the Authority are determined internationally and by reference to an agreed formula. That formula, which is highly complex, essentially relates our unit charges to the costs we incur, the weight of the aircraft and the distances flown in our airspace. I made that clear on my second last visit to the House.
These internationally agreed formulas are standard detail arrangements and do not come within the ambit of section 7. I must emphasise that the Authority's fees and charges would have relatively little impact on the Irish economy or on the Irish aviation industry. Over 80 per cent of ANSO revenue — and this will become Authority revenue — comes from foreign airlines who fly in transit through our airspace. Given that the bulk of the Authority's charges are determined internationally and that they do not impact to any great extent on the Irish economy, we have specifically excluded any question on the Minister's involvement in the fee charging process.
In the circumstances I have outlined, the amendment proposed by Senator Ross is redundant and would be neither necessary nor acceptable. As some Senators have remarked, it is appropriate that the Irish Aviation Authority — which will be part of the public sector — should be subject to general Government policy control. This section provides for that. I repeat, I will not be able to accept this amendment.
I thank the Minister. His concluding remarks do not surprise me. They are not satisfactory because they are in direct conflict — I will put it on the record again — with what he said on Second Stage, where he said that the Minister has the power to intervene or to give a direction on anything. He was asked whether that was correct and he said "That is correct". That is still my understanding of how——
Continue, read the detail, read on.
——this Bill will be interpreted. If that was correct, the Minister could happily accept this amendment. He could take it on board just to reassure us. It is in direct conflict with what the Minister said on Second Stage so I am not reassured. I reassure the Minister, however, that I am not going to embarrass the Government by calling a vote on this.
Amendment, by leave, withdrawn.
I move amendment No. 2:
In page 17, between lines 14 and 15, to insert the following:
"(c) (i) the Minister shall appoint the Chairman of the Public Accounts Committee as a director,
(ii) the Minister shall appoint a worker-director to represent the Irish Aviation Authority workforce;".
We on this side of the House feel very strongly on those two points. We have outlined already why there should be worker participation on this board. Nobody would be a more suitable director of a company than a member of the workforce who would always have the interests of the company uppermost.
The Chairman of the Committee of Public Accounts should also be a member of the board. We need a watchdog on the board because we have given this company and subsidiaries of this company the power to raise considerable amounts of money with State guarantees. The participation of the Chairman of the Committee of Public Accounts on the board is a small thing to ask the Minister.
I second the amendment. There is considerable merit in this amendment. In relation to the Chairman of the Committee of Public Accounts, experience in the past few years has shown that if there had been a better system of observing their performance, keeping a closer eye on certain activities, the problems and embarrassment which arose in certain State companies could have been avoided. This proposal is no reflection on the integrity of the people in ANSO or those who will lead the new body. It is an essential safeguard of the interests of the citizens and we, as Members of the Oireachtas are very conscious of our duty in this respect.
We debated at length worker participation on the board and the wording in the amendment is that the Minister "shall", leaving no doubt that there will be a workers' representative on the board of the Authority. On Committee Stage the Minister indicated that he was providing for the power to do this, he may do it, but the purpose of this amendment is to ensure that there is no ambiguity.
Having failed to get the provisions in the worker participation Act implemented in relation to the appointments to the board, the next best option is to ensure that the Minister shall appoint a worker as a director. We do not want any ambiguity here. I do not wish to prolong the discussion. The points we made are obvious and I hope the Minister will respond in a positive manner.
I am confused about these two amendments. Listening to the evolution of the debate over the last few occasions I thought that we were trying to remove the aviation authority from the slightest hint of political interference. These amendments do not take account of the Bill as it is constituted at present. There is no reference in the amendment to section 37. I presume the amendments are in order but I am not absolutely certain.
Senator Burke and Senator Howard are trying to have the Chairman of the Committee of Public Accounts appointed to the board of the Authority. I fully appreciate their desire for public accountability. However, mechanisms for ensuring the public accountability of the Authority already exist.
As the House will recall, we have placed time limits on when the Authority must report to the Minister and a time limit by which the Minister must submit the Authority's report to the Oireachtas. To place the Chairman of the Committee of Public Accounts on the board of the Authority would conflict with section 37 of the Bill, which provides that Members of the Oireachtas and the European Parliament may not serve as directors or members of staff of the Authority. This is to ensure that the Authority remains independent and that its directors and members of staff are not influenced by any party political considerations.
Conversely, if the Chairman of the Committee of Public Accounts were a member of the Authority, his or her position and independence could be seriously compromised. For example, there will be significant cash flows involving millions of pounds between the Department of Finance and the Authority and between the Department of Communications and the Authority. Disbursement and accounting of these funds on the Department's side will eventually be matters for scrutiny by the Committee of Public Accounts. If the amendment was accepted, the Chairman of the Committee of Public Accounts would inevitably be involved in the Authority's decisions on these matters. When the departmental accounts come before the committee, the independence of the chairman could validly be questioned. I will go no further than that. I am sure the House will recognise that it would be ill advised for me to accept this amendment on behalf of the House and the Legislature.
The second part of the proposed amendment seeks to require the Minister to appoint a member of the Authority's staff to the board. While it is open to the Minister to do so, I do not agree that he should be compelled to appoint staff members to the board. I believe in a practical approach to the question of worker directors. These worker directors can and do make a notable contribution in many commercial and semi-State bodies. However, I believe that the appointment of a member of staff to the board must be handled with a degree of sensitivity on both sides. As the House is aware, this arrangement where the Minister can appoint a member of staff, but is not obliged to do so, works very successfully in other cases.
Placing an obligation on the Minister to appoint a member of staff would unnecessarily compromise the degree of sensitivity required. It is the Minister's responsibility to appoint the best people to administer the Authority and his choice should not be circumscribed. Based on our present situation, on section 37 of the Bill and on the fact that the right must be given to the Minister to take his decision without requiring him to execute that decision, the attitude in the Bill is flexible and practical. This decision is best left with the Minister. It will give more credibility to the legislation, require the Minister to take a positive and responsible attitude and ensure that the sensitivities involved in the appointments are taken fully into account by both the person making the appointment and the person executing the appointments thereafter.
I had no option but to press this amendment since we are giving serious powers to this company to raise funds with State guarantees. We have already outlined our case in relation to worker participation and without causing any further delay this evening I am pressing the amendment.
Amendment put and declared lost.
I move amendment No. 3:
In page 29, line 53, after "unpaid" to add "provided that such rate shall not be lower than the prevailing Dublin Inter Bank Offer Rate."
I propose this amendment due to lack of assurance from the Minister of State on Committee Stage about the payments that have to be made for the superannuation fund. What alarmed me most was that the Minister for Finance would be able to decide the interest rate which he gave to the superannuation fund. We identified a distinct conflict of interest here, where the Minister on behalf of the taxpayer is making a decision about the interest rate that the taxpayer will pay. This cannot be fair to the superannuation fund and fair to the taxpayer. It is impossible. The Minister for Finance is, as the Minister of State knows, one of the fairest men in the world; but if he has this power and exercises it, he will come in for criticism about the interest rate he strikes when he pays the necessary into the superannuation fund. It is too much to ask any Minister to set the interest rate on such an extraordinarily large amount of money.
I do not know of any precedent where the Minister has this power, but in future it could be open to abuse. I do not know when this money will be paid; the Minister of State does not know and was not specific about it. It could be open to an unscrupulous Minister to pay nothing, an interest rate of zero; or it could leave it open to an unscrupulous Minister, who was compromised, to pay an interest rate which was way above the prevailing rates. It is a discretionary power which should not be left in the hands of any particular person. That is why I looked for a suitable formula for the Minister to use. If he uses the Dublin inter bank offer rate nobody could question that he is using an impartial independent yardstick for an interest rate of this sort. The Minister could use the one month money rate of the money markets, or plus or minus 1 per cent; or he could use the Central Bank's short term facility rate, plus 1 or 2 per cent, rates over which he has no power. It is invidious to the Minister to give a discretion of this sort to him and it is open to abuse.
I second the amendment and support the arguments put forward by Senator Ross. This section is one about which some of us expressed considerable concern as to the capacity of the superannuation fund to survive, if it had to, for a period of seven years. I proposed an amendment on this section on Committee Stage, which I withdrew on the understanding that the Minister of State would positively respond on Report Stage. I take it by the Minister of State's silence so far that he does not intend to do so.
Many issues were debated at length last week on this section and this amendment is a simple safeguard that the interest rate would not be lower than the Dublin inter bank offer rate. It is reasonable, considering the options or the opportunities available to a Minister should he decide to play rough with the superannuation fund and the provisions for it in section 40. Therefore, I support the amendment. I regret that the Minister of State did not see fit to respond in kind to my withdrawn amendment on Committee Stage, which would have sought to reduce from seven to two years the period in which the Minister would make the contribution to the fund.
Senator Ross and Senator Howard propose to amend section 41 to ensure that the interest rate paid by the Minister for Finance on the outstanding balance of his superannuation liability shall not be less than the Dublin inter bank offer rate. Senator Ross has argued that the Minister for Finance would be pressing for a low interest rate while the trustees would look for a high interest rate. That would be normal. Clearly, the Minister for Finance can set the interest rates to suit his concerns. However, that will not deter or debar the trustees from negotiating the best rate which they can get from the Minister. The Minister for Finance has a wide range of responsibilities, which I outlined previously. These include the need to adopt an evenhanded and equitable approach in matters such as this.
Senator Ross, who has encyclopaedic knowledge of the financial markets——
The Minister is a flatterer.
——will be well aware that this is a normal bargaining situation.
An Leas-Chathaoirleach
I never saw Senator Ross embarrassed like that before.
Such situations are resolved through a normal and common negotiating process. It must be recalled that if the trustees received the full £60 million on the vesting day, they would be required to invest it in various interest bearing instruments. Thus the interest rate to be paid by the Minister for Finance can be likened to the interest rates the trustees would have received had they had the £60 million from the outset. The objective of all pension fund trustees and their investment managers is to maximise the return on fund investments. Neither I nor, I am sure, the trustees will be dismayed by a difference between the interest rate agreed with or even imposed by the Minister for Finance and that he may pay, and that which might have been earned by the trustees in alternative instruments. That difference for the relatively short period of less than seven years will be well within the normal spread of investment returns that any pension fund will have.
I dealt earlier and at length with these issues which the Senators have raised in detail. I did so because, as always, when I visit this House I am anxious to be as helpful, co-operative and informative as possible. Superannuation and the vast range of issues involved in the funding and financing of pensions, though complex, is an issue of vital concern to all of those involved. I would be dismayed if in discussing these abstruse matters we were to undermine the confidence ANSO management and staff have in these arrangements.
I appreciate the erudition Senator Howard has brought to the Bill. As I have made clear on a number of occasions, our strategy in this section goes beyond what has been agreed in relation to other bodies. In this Bill we are providing that the Minister for Finance will discharge his accumulated superannuation liabilities to ANSO staff over a seven year period. We have also, as the House is aware, provided that the Minister for Finance will be liable for interest charges on the outstanding balance. For comparison, let me remind the House that in the case of most other bodies — for example, Telecom Éireann, Coillte, An Post and others — there is no time limit set in which the Minister for Finance must discharge his liabilities. By contrast, here we are setting a strict time limit for the Minister for Finance and we believe that the proposed seven year period in the Irish Aviation Authority Bill is a reasonable arrangement. The Minister for Finance would happily discharge his liability in a shorter period but for the amounts involved. They are not insignificant sums.
Senator Howard is concerned that the Minister for Finance might defer paying anything to the superannuation fund until the seventh year. As I said the last day, this is theoretically possible. By then the Minister's gross liability, including interest, would be of the order of £100 million pounds. It is important, however, to realise that there is no question of the Minister evading his responsibilities and I am sure that no Member of this House would make any such suggestion.
Because of concerns that the Minister for Finance might defer meeting his liability until the seventh year, it was proposed that we should have specified the amounts or proportions to be paid each year. While we were sympathetic to this approach, we could not find a formula that on the one hand was sufficiently tight while also was reasonably flexible. In any case I can assure Senators that we have done the necessary calculations and have confirmed that, even if the Minister for Finance does not make any payment for seven years, we will be able to fund all pensions arising in that period. The superannuation element of the user charges that the Authority will receive amounts to 20 per cent of payroll. This, as the House will appreciate, provides a superannuation fund cash flow of up to £3 million per annum.
I might remind the House also that the final liability cannot be specified until the actuarial valuation is carried out on vesting day. As the Act must be passed before we can have vesting day, clearly it would not be possible to include a specific annual amount in the Bill. There is also the added complication of the interest payments. Clearly, specific arrangements would have to be made each year between the Department of Finance and the trustees of the pension fund about the Exchequer payment and the discharge of the outstanding interest. The arrangements will include such matters as the amount of principle and interest being paid over, the dates on which payments will be made and the rates of interest applicable.
Given the seven year payment period included in the Bill and the number of variables involved, it would clearly be impractible to cover every possible permutation of circumstances in the Bill itself. Conversely, the approach we have used in the Bill is practicable. It sets a framework within which the trustees and the Minister for Finance can adequately discharge their respective responsibilities.
I may have been mistaken, but I had the impression that Senator Howard felt that the Minister for Finance might or would make payments of principle only but defer paying interest until the seventh year. That would be highly unusual, as, I am sure, the Senator would appreciate. It is most unlikely that the Minister for Finance would adopt such an approach. I have had discussions with the Minister for Finance; my colleagues in the Department and in ANSO have had discussions with the officials in the Department of Finance. We are satisfied that there is a positive attitude on all sides and that obligations will be discharged reasonably and fairly over a seven year period, thus putting into position a sound and solid superannuation fund and a pension trust to be administered by the trustees in the interests of the staff of the new Authority.
As I have already made clear, the approach we have adopted is innovative. It is was not done in law before and, despite some misgivings that Senators may have, I am satisfied that the arrangements as set out in the Bill are a sound, practicable approach which will work to the satisfaction of all concerned.
I do not believe that the Minister would expect me to find his response that satisfactory. Throughout the progress of this Bill the Minister is getting good at his adjectives but not so good on detail. His reply is full of words such as "equitable" and "an equitable approach", which means pretty well nothing.
Fair and reasonable, flexible.
"Even handed", "flexible", "innovative". All these good buzz words——
Structured.
——mean little in terms of detail. Throughout the progress of this Bill I have begun to admire the capacity of the Minister for obfuscation and for not answering questions. It is something which has stood the Minister in good stead throughout the last few weeks.
On this amendment the Minister has excelled himself. It is totally unsatisfactory that we should be asked to give the Minister for Finance carte blanche of this sort. The Minister said, in response to some of the points made by Senator Howard, that it would be highly unusual — a negative rather than a positive, but a negative to describe unlikely behaviour — rather than a positive to describe likely behaviour, if the Minister waited for the last day to make that payment. Of course it would be unusual, but that is exactly what we want to stop. As the Minister quite rightly says in this case, which is a magnificent paradox in view of what he has said so often, this is a new piece of legislation establishing a new principle in which he has great confidence. We have been reassured throughout the Bill that other clauses in other Bills have stood the test of time. One cannot have it both ways. I would put it the other way. I believe that this clause is doubtful because we do not know whether it is going to work or not and the past clauses should perhaps be questioned because they have been there for so long.
The Minister spoke of a positive attitude. The bottom line here is quite simple. The Minister can pay the superannuation fund zero per cent at the end and nothing for seven years. That is what we are entitling him to do in this Bill. The Minister assured us that there will be negotiations. There will be no negotiations. One cannot negotiate if the power all rests on one side. That is not negotiation; it is dictatorship. Of course the Minister will meet with the trustees of the superannuation fund, but he will meet to tell them what he is going to pay them. He will not meet to ask them because at the end of the day the Minister is going to decide, not the trustees. We can have all these wonderful reassurances of reasonableness from the Minister on this issue. I have no doubt that the Minister would be reasonable and would pay a current commercial rate or would pay a rate which would satisfy the superannuation fund. This Minister would. The Minister for Finance, Deputy Ahern would, as he is one of the most agreeable Ministers in the Government. One of his problems is that he is being too agreeable in this Government.
He is not.
However, future Ministers have it in their power to pay a discretionary amount and that is unacceptable.
Amendment put and declared lost.
Bill reported without amendment and received for final consideration.
Question proposed: "That the Bill do now pass."
I appreciate the attitude of the Minister over the days that the Bill was debated. We did not secure any amendments, but I suppose that was highly unlikely. However, we did get a good deal of clarification which I appreciate. I want to thank the Minister for the manner in which he approached the debate and I also want to include in that thanks to the staff in the Minister's Department, whom I am sure made a considerable contribution to the preparation of the legislation.
I also thank the Minister for his attitude and his help throughout this Bill. While he could not expect us to accept all his replies, they were well researched, good tempered and accommodating. In the light of that we decided, when we saw on the Order Paper today that the Bill would continue from 8 p.m. to 10 p.m., that we would give an easy night to the Minister and the staff he has behind him, who have been very helpful.
I wish to be associated with those remarks. I thank the Minister and his staff. The Minister was well on top of his brief.
I compliment the Minister. I personally thank his staff, who have been most helpful to me on various aspects of the Bill. It has been a difficult piece of legislation, which the Minister successfully steered through the Dáil and the new committee. The amount of time spent on debate was worthwhile. Many of the proposals from the other side of the House, either in the form of ideas on the floor of the House or in the form of amendments, were debated in an informative and enlightening manner. That is a tribute to this House. I would like to believe that, despite the fact that the amendments were not accepted by the Minister, the debate has strengthened this Bill. I wish the new Authority every success in its endeavours.
Ba mhaith liom ar mo shon féin agus ar son muintir uilig an Oifig Aerloingseoireachta mo fhíorbhuíochas a ghábháil le muintir an Tí seo as ucht an díospóireacht spridiúil a bhí againn ar an mBille seo. Tá súil agam gur bhain sibh an-sásamh as mar a bhain mé féin agus mo Roinn. Ar ndóigh sna blianta atá romhainn tabharfaidh an díospóireacht seo misneach don Údarás nua.
On my own behalf and on behalf of my Department, the staff of ANSO and the Minister, Deputy Cowen, I thank all Members of the House for their tremendous contributions. I have the utmost confidence, respect and faith in the ability of Members of this House and my colleagues in Dáil Éireann to take a positive and flexible attitude to legislation. We have a great responsibility and I think we discharge it well. There are those outside of this House who decry it and some in political life have also done so, much to my amazement. One great aspect of Seanad Éireann is that it gives an absolute transparency to the legislative effect proposed in the various Bills coming through. I appreciate that as a member of the Government.
I am grateful for the positive attitude taken and the interest shown by the Members of this House in all the legislation, and most particularly this Bill. Contributions from all sides were positive, useful and practical. The occasional discordant note was struck both in this House and in the media. However, to paraphrase a remark of the late Brendan Behan, the only bad publicity is on a tombstone.
I am pleased this organisation was not strangled, as some suggested. I have no doubt the new Authority will realise its full potential and prove to be a successful addition to the Irish aviation industry.
I believe the aviation industry and the system of aviation management is of great interest. I invite the Members of this House, individually or collectively, to visit the air traffic control centre in Dublin Airport. Perhaps a group visit would be more advisable but I would be only too delighted to enable you to visit to see the system operating at first hand. It is a fascinating and sophisticated system and the responsibility on the staff is onerous.
I thank you, a Leas Chathaoirligh and the Cathaoirleach for the way you have chaired the debates and brought them to a successful conclusion. I enjoyed handling the Bill and I am grateful for the input of individual Senators and for their positive contributions. I am also grateful for their attitude. When I did my best to give all the information available to us, it was by and large accepted. That is a positive reflection on the membership of the House. I ndeireadh na dála, mo mhíle buíochas díobh agus guím rath Dé oraibh uilig.
Question put and agreed to.
Sitting suspended at 5.55 p.m. and resumed at 6 p.m.