Dáil Éireann Debate, Tuesday - 29 September 2015
231. Deputy Pearse Doherty asked the Minister for Finance the return that would have been received on an investment of €27.2 billion in the National Treasury Management Agency, based on the average returns since September 2009. [32812/15]
View answerIn answering this question my officials and the National Treasury Management Agency have raised concerns in applying an average return to an amount of State investment funds, to which it is assumed the Deputy is referring. The difficulty in determining an appropriate average return to apply to State investments is created by the endogenous nature of any State investment. For example, the State decision to invest funds in the banking and payment systems has improved all other average returns, as well as overall economic growth.
There are a number of average returns that could be considered, including the average actual returns of Irish pension funds but they are not a reliable guide as without the State's support for the financial system these would have substantially fallen in value. Another option would be using the return on the discretionary element of the National Pension Reserve Fund (NPRF), however, this is not an accurate measure because of the necessity to invest the NPRF's liquid assets in the financial system. This meant that the average return on the NPRF discretionary portfolio was very different from 2009 onwards due to their being a greater holding of long term illiquid assets, as opposed to a better mix of liquid and long term assets.
It may be of interest to the Deputy to note that the Comptroller and Auditor General has included a chapter in his 2014 annual report, which has been published today, on the costs of Banking Stabilisation Measures.
Please see the link to the chapter concerned below.
http://www.audgen.gov.ie/documents/annualreports/2014/report/en/3%20cost%20of%20banking%20stabilisation%20measures%20as%20at%20end-2014.pdf
In the interim, if the Deputy would like to follow up with my private office I can arrange for officials from my Department and the Irish Strategic Investment Fund (ISIF) to provide more information on the difficulties of applying average investment returns to State holdings or for them to help clarify the issues that he raises.
