John McGuinness
Question:62Deputy John McGuinness asked the Minister for Public Expenditure and Reform the expected timetable for the commencement of the sale of State assets; and if he will make a statement on the matter. [11192/12]
View answerSale of State Assets
Questions (6, 7)
Michael Moynihan
Question:82Deputy Michael Moynihan asked the Minister for Public Expenditure and Reform the primary criteria that he will apply in determining the way in which it is best to proceed in relation to the sale of State assets; and if he will make a statement on the matter. [11195/12]
View answerOral answers (14 contributions)
I propose to take Questions Nos. 62 and 82 together.
Following my announcement of the programme of State asset disposals last week, work is progressing on plans for the disposals. All of the relevant Departments will participate, overseen by my Department and with the assistance of NewERA. The objective is to identify by the end of March any remaining policy, regulatory, legislative and-or financial issues that may need to be addressed prior to disposal. Great care will be taken at all times to ensure any decisions are in the national interest and represent value for the Exchequer. It is intended that any issues arising will be addressed by the end of 2012 in order to facilitate transactions commencing in 2013.
I refer to Question No. 82. I asked how the Minister intends to proceed with regard to the sale of State assets. Has he an open mind with regard to the public placing of shares, the placement of shares with certain financial institutions, an invitation to expressions of interest and the sale of assets to the known businesses in the trade? Has he asked the NTMA to draw up a list of power companies who will be invited to bid? I understand a number of sharks are out there - the term used by Bord Gáis Energy - who want to take over that business.
I ask the Minister to explain the process for the sale of the assets. I do not mean to say I agree with a selling process but I wish to hear the Minister's intentions as to the process he intends to follow.
Detailed analytical work commenced immediately following the Government decision with regard to Bord Gáis Energy, the ESB and the Coillte proposal, which is being considered. The process will examine the regulatory and legislative difficulties, the best placement procedures and how to obtain best value. These matters are currently under consideration. I am required by the Government decision to revert to the Government by the end of March to address those issues and to set out how we intend to proceed.
As for the other decision, the Minister for Communications, Energy and Natural Resources, is looking at those generating assets within the ESB which are non-strategic and which can also be available for sale. The idea is to sell Bord Gáis Energy with some ESB power generating in a bundle or sell some of the generating capacity of the ESB separately in order to have a significant nucleus of energy generating capacity that would be competitive and offer best value to ensure that the cost of energy is as competitive as possible. There is a double value. First, we will try to get a maximum price and, second, we want to get a strategic change so we will have real dynamic competition within the energy sector in the interests of business and the consumer.
Are the people in NewERA and the NTMA factoring in the issue of pension fund deficits in these organisations and whether there will be an employee share option scheme, as happened in some previous privatisations?
As Deputy Fleming is probably aware, there is an ESOP scheme already in Bord Gáis Éireann. A little over 3% of the company is owned by the employees and that will be part of the things which will be addressed now because, as Deputy Fleming knows, the company is well on the way to being disaggregated into the transmission and the generating elements of it. The transmission elements of it, including the gas interconnectors and so on, will remain in State ownership. What is proposed to be sold is the generating capacity of it, which is not strategic. If we can have a significant new player in the Irish market, it will be in the interests of the consumers and industry generally. The other point Deputy Fleming made about pension funds and deficits is a factor which is being taken into account.
In the case of both the ESB and Bord Gáis Éireann, the workforce holds shares so, with that in mind, I was curious to hear the Minister had not spoken to the trade unions. He might do that with some urgency because the employees will have a view on all of this.
The Minister repeatedly made a claim today that the sell-off of these assets is somehow a pathway to enhanced competitiveness and reduced prices. I am sure he is as aware as I am that the history of deregulation of the energy sector in this small island has never resulted in a dip in prices. In fact, we moved rather spectacularly from having very low energy prices to now having among the highest across Europe. It probably makes a good sound bite for the Minister in selling this fire sale but I do not think it is an argument he can substantiate.
The Minister said he will raise €3 billion. Notwithstanding giving us figures down to the cent, he must have some sense of the individual value of these assets. I put it to him that there is a reason these assets are attractive to put on the market and bidders will be interested in them. It is because they generate very significant revenue.
It is very hard to take lectures about sound bites from Deputy McDonald. She is the master.
I take that as it is intended.
I say that as a compliment. She used four sound bites in the question, including representing it all as a fire sale when not only the decision but the memorandum of understanding with the troika makes it crystal clear there will not be a fire sale. If we do not get a fair price for these, we will not sell them. It is as simple as that, so that will ensure there will not be.
I refer to the other point Deputy McDonald made and all these things one cannot let go, because she throws these things in as almost the truth, and this is the notion that this is deregulation. It is anything but deregulation of the energy market.
I did not say that.
We want to achieve real and better competition in the energy market.
I refer to the notion that it is somehow a bad thing to get a good price for them and that we will get a good price for them because they are valuable assets. Of course, we want to get the best price because we need to pay down some of the State's debt. That is not a bad thing of itself, that is, to take some of the terrible burden of debt off the Irish taxpayer. We also want to get some access to money to invest in the productive economy. We have got a very good deal where one third of the total asset sales can be used for that purpose.
The Minister told us there will not be a fire sale. He said he will get full value for the State. Would he agree that is not likely to happen in the next two or three years given that the price of everything has gone so low? It beggars belief for him to think he can get real value for this in the next two or three years. Will there be a detailed cost benefit analysis to weigh selling State assets against the long-term costs to the economy, society and the environment? That would be interesting.
The Minister said there is no great strategic value to the State's holding of 25% but we must remember that the staff hold 15% and, combined, at 40% it is the largest stake by far.
The question asked about the criteria used by the Minister in proceeding with the sell-off. Why did he think it unnecessary to examine fully each State asset in terms of the social, economic and environmental value? I refer in particular to public forests, which could be managed in a way that is of enormous benefit to citizens in this country. I ask the Minister to comment on why we have 11,000 people employed in forestry when a country half our size, Switzerland, has 120,000 people employed in forestry. Why is he not analysing our State assets in this way?
That is worthy of a long debate and the Minister for Agriculture, Food and the Marine would be delighted to have it. The percentage of land under forest in Switzerland is of a different magnitude to the percentage under forest in Ireland, if the Deputy had not noticed. We need more forestry and this Government has given clear attention to it in the programme for Government. Managing forests means harvesting the crop in the public interest. There is a difference in the decision. We will consider the Coillte proposal because other proposals have been made for the use of the forest. The Minister is examining these and we will make the best strategic decision for the Irish economy.
The questions of Deputy Wallace are like saying that we should ignore the current economic crisis. We must map our way out of it with every tool available. It has long been said that austerity alone is not a strategy, a criticism with which I agree. It must be part of the strategy because the only people who will give us money have attached conditions to the money. That is why we must achieve the deficit reduction target. There is no gainsaying that and anyone who understands economics understands that. We must also have a growth strategy and utilising some of the assets to invest in the productive economy is part of that strategy. There are other elements, such as the development of the NewERA entity and the strategic investment fund, to which we have committed €250 million from the National Pensions Reserve Fund, NPRF. We will leverage that to €1 billion for investment in job creation and we also want to use the residual part of the NPRF. I had a discussion on the use of other pension funds. We want to release that because of the €70 billion in pension funds, only 2% is used in the productive economy. There will be a range of initiatives to leverage further investment for a growth strategy to mirror the strategy of balancing books.
Flood Relief
Questions (8)
Denis Naughten
Question:63Deputy Denis Naughten asked the Minister for Public Expenditure and Reform the steps he is taking to address the summer flooding in the Shannon callows; and if he will make a statement on the matter. [10587/12]
View answerOral answers (1 contributions)
The Deputy has, on a regular basis, raised the matter of management of the River Shannon catchment, which includes the Shannon Callows area and that extensive responses have been provided. The information I am happy to provide remains much the same as that provided previously. In addition, a full corpus of updated information on both the national and Shannon catchment flood risk assessment and management, CFRAM, programmes is available on the respective websites.
I reiterate that the assessment and management of flood risk on the Shannon catchment comes within the CFRAM programme, the national programme covering all national river catchments. The national programme represents a major investment of several tens of millions of euro by the State in a comprehensive study of flood risk, which will produce robust, evidence-based and extensive management plans to drive the management of flood risk across the country. This is a comprehensive undertaking and a significant part of the OPW's resources are being dedicated to ensuring its completion.
Given the scale and nature of the programme over a four year lifecycle, up to the end of 2015, the Deputy will appreciate that clear direction as to improvements in the management of the River Shannon catchment and mitigation of localised flooding risk in areas like the Callows will not emerge until the programme has reached its conclusion. The Government is determined to ensure that a comprehensive CFRAM programme will form the core of a properly informed and managed approach to addressing areas of flood risk in the coming decades. This approach will allow us to go beyond the reactive deployment of resources where OPW generally intervenes with capital works projects after significant flood events to a more anticipatory stance whereby evidence-based and prioritised interventions can be programmed in advance of and in prevention of future flood events.
Public Sector Pay
Questions (9, 10)
Peadar Tóibín
Question:64Deputy Peadar Tóibín asked the Minister for Public Expenditure and Reform if the Implementation Body will review high pay in the public sector during its annual review consultations this year. [11220/12]
View answer
Aengus Ó Snodaigh
Question:73Deputy Aengus Ó Snodaigh asked the Minister for Public Expenditure and Reform if the Implementation Body give priority to public servants with €35,000 or less in its annual review. [11222/12]
View answerOral answers (11 contributions)
I propose to take Questions Nos. 64 and 73 together. The implementation body established under the public service agreement 2010-14 is charged with driving the implementation of the agreement to maximum effect. The body also undertakes an annual review of the sustainable savings generated from the implementation of the agreement. The first review by the implementation body was published in June 2011.
The implementation body has no role in the review of pay rates in the public service, which is a matter reserved to me as Minister, under the Financial Emergency Measures in the Public Interest (No. 2) Act 2009, as amended. That Act, which imposed a progressive pay reduction on all public servants ranging from 5% to 30% with effect from 1 January 2010, provided that before 30 June 2011 and every year after that the Minister shall carry out a review of the operation, effectiveness and impact of the Act and lay a written report of the findings resulting from the review before each House of the Oireachtas. In the public service agreement, the Government agreed that the statutory review under the Act would take account of the sustainable savings generated from the implementation of the agreement. In the event of sufficient savings being identified in the 2011 review by the implementation body, it was agreed that priority would be given in any review of pay to public servants with annual pay rates of €35,000 or less.
In line with the requirements under the 2009 Act, I completed a review of its operation in June 2011. The report was laid before both Houses of the Oireachtas on 30 June 2011 and has been published on my Department's website. The report concluded that, having regard to the overall economic conditions, national competitiveness and Exchequer commitments in respect of public service pay, the measures put in place by the Act continue to be required. This remains the position pending a further statutory review of the Act in June next.
I am not sure if the answer to the question is "Yes" or "No". My question was to review very high pay in the public sector. I had in mind the 7,000 people who earn in excess of €100,000. In the same context, it is useful to note that 10% of families in receipt of family income supplement, the lowest paid workers in the State, are public sector workers. The Minister has identified a mechanism by which such review of very high pay could be undertaken. Will the Minister give us a clear "Yes" or "No" answer on the review?
In response to an earlier question, the Minister set out the extravagant levels of pay of the Taoiseach, the Tánaiste and Ministers. Those payments cannot be justified. A small section of workers, some 7,000 in the public sector, are vastly overpaid. Will the Minister review that matter and correct it under emergency legislation?
I have made it clear that this is the first Government ever to take serious proactive action to deal with hope in the public service. We reduced pay by between 5% and 30%. A 30% reduction was taken by the Taoiseach. That should be acknowledged. I also placed a pay ceiling on the public service so that no one in the Civil Service or public service should be paid more than €200,000. That has been largely implemented except where contractual obligations precluded us from implementing it. In those cases, I sought a voluntary reduction. In the semi-State sector, we introduced a ceiling of €250,000 and when considering that multiples of that sum were paid up to last year, the Deputy should acknowledge the remarkable achievements of the Government in reducing public-----
Do I take it the answer is "No"?
No matter how far we go, it is never enough for Deputy McDonald. We must ensure that we have quality people in the public service and a variety of skills. The Deputy has no doubt read the Nyberg report on the operation of the Department of Finance.
One of the deficiencies identified was that there were not enough experts and economists to operate a very complicated banking system. The Government and I are very pro-public service and want people of the highest calibre available. We do not want to pay rates to buy in from the private sector the skills the Government requires.
Some 10% of them are on family income supplement. The Minister is protecting people on outrageous salaries. The answer is clearly "No".
Does the Deputy have a question?
A Deputy
Print it off.
The Deputy is firing blanks.
I assumed Other Questions was finished. I can only read from the response of the Minister that he is quite happy for a significant number of public servants to be so poorly paid that the State has to supplement their income with family income supplement, while giving us codswallop about expertise and skills to explain salaries he knows no sane person could justify.
I ask the Deputy at least to acknowledge what we have done to date. For the first time we have put in a ceiling of €200,000. The Taoiseach is receiving 30% less in pay than his predecessor. We have reformed the expenses and car transport systems and introduced new pay ceilings across the public service of €200,000 and €250,000.
The pressure will be whether in the commercial semi-State sector we will get people of sufficient calibre to run the very companies we have been asking questions about. They will be important in driving our economic development. In terms of ensuring we have people of the highest calibre and ability working in the public sector, the Government will ensure that arrives.
The Deputy made a valid point on ensuring that everybody is paid a fair wage in this economy. That is why one of the first things we did was to restore the minimum wage, something the Deputy said was impossible. It was achieved in the first couple of months of this Government. As our economy recovers, we will try to ensure everybody has a projection of increased income. I hope we can do that on the basis of fairness to shrink the gap between those earning most and those earning least in our economy.