A COMMITMENT that the Government will not delay a decision on the sale of State assets has been given by Minister for Public Expenditure and Reform Brendan Howlin.
He was responding to the report of the review group on State assets and liabilities, chaired by economist Colm McCarthy and published yesterday, that details how €5 billion could be raised through the sale of State assets.
Mr Howlin said he would put each of the report’s 55 recommendations to the relevant Government departments and decide as soon as possible how to implement them.
He said the Government had promised to dispose of up to €2 billion in assets, but pointed out that the report had warned against “fire sales”. Defending the Labour Party’s agreement to the sale of State assets in the programme for government, Mr Howlin said: “We are a party and now a Government of job-creation.
“We want to leverage any tools available to us to get people back to work. The shocking thing for us is the level of unemployment and we want to give employment and that is our core value.”
The Minister also pledged that the Government would launch an early review of pay levels in the semi-State sector, especially at the highest levels. He said some people would be “surprised and shocked” at some of the salaries in semi-State companies identified in the McCarthy report.
The Minister added that, arising from discussion on the report, he had been mandated by the Cabinet to review pay rates across the public sector generally. There were 28 people in the public sector, not all in State companies, still earning more than €250,000 per year, he said.
“We have a smaller-scale economy and a lot of people taking great hits in their income. If we have any sense of fairness and solidarity, we have to look at pay rates across the public sector generally. I have been mandated to look at this,” he said.
The McCarthy report recommends a comparison of pay and conditions in commercial State companies with those elsewhere in the Irish labour market and in competitor markets such as the United Kingdom.
Among the other key recommendations of the report are:
the sale of the ESB’s energy supply and electricity distribution businesses, power generation assets and its international businesses;
the retention in public ownership of the ESB and Bord Gáis transmission grids;
the sale of Bord na Móna but the retention of the company’s land in State ownership;
the sale of Coillte’s assets, including timber, while the State retains the land;
the sale of the State’s 25 per cent stake in Aer Lingus;
a substantial increase in the share of the television licence fee that goes to private sector broadcasters;
the sale of the National Stud; and
the sale of CIÉ’s long-distance bus operation.
Mr McCarthy advised against a “fire sale” of State assets, saying “they can’t be put up on Ebay tomorrow”. He added, however, that assets would never recover the value they had at the peak of the boom, and that waiting for 2006 or 2007 prices would mean waiting forever.
“It’s not easy to point to companies that could be sold very rapidly. We haven’t really tried to get into the mechanics of the disposal of things. I would be surprised if any of these could be sold within the next calendar year.”
Mr McCarthy said the bailout by the International Monetary Fund and the European Union meant the Government wasn’t under immediate financial pressure, but the sale of assets would help the State deal with its debt problem.
Irish congress of Trade Unions general secretary David Begg said the experience of privatisation of telecommunications assets with Eircom had been very bad.
“Therefore the initial response of Congress to this report is that it has little to offer the country at this time. However, we will undertake a forensic study of its contents and reasoning and issue a more comprehensive statement in due course.”