Proceeds of asset sales 'could be used for jobs plan'

The Government could potentially use funds raised from the sale of State assets to invest in job creation plans, Minister for Public Expenditure and Reform Brendan Howlin said this morning.

Mr Howlin said the Government had succeeded in persuading the EU and IMF that the proceeds of the sale of some assets could be used for job creation programmes, rather than to pay off the country's debts.

He was speaking a day after the review group on State assets and liabilities published a report which details how up to €5 billion could be raised through selling semi-State companies.

The three-man review group, headed by economist Colm McCarthy, recommended a number of possible options to the Government, including the break-up and partial sale of ESB and Bord Gáis, the disposal of the State's 25 per cent stake in Aer Lingus, the sale of Coillte's assets and the sale of the National Stud and Bord na Móna.

The report also recommends a comparison of pay and conditions in commerical State companies with other firms both in Ireland and abroad.

Mr Howlin said today that the Government had secured a commitment from the EU and IMF that it would consider any proposals to divert the proceeds from the sale of assets to job creation projects "on a case-by-case basis."

Speaking on RTÉ radio, Mr Howlin said the EU-IMF was "wedded to the notion" that the proceeds from the sale of such assets should be used to pay off debt. But they had not "closed the door" on the argument the funds might be used for job creation initiatives.

"The view of the EU-IMF partners was to maintain the existing agreement that any asset sale or windfall or money coming into the Government coffers would be used to retire debt and of course there's a compelling case for that," said Mr Howlin.

"But we have engaged with them and argued that where we have a viable case to make that we should have the facility to use that in job creation initiatives and it was agreed that we could make that case on a case-by-case basis and that's what we intend to do," he added.

He said the discussions on the use of asset sale proceeds for job creation programmes was made during talks leading up to the first review of Ireland’s €85 billion international rescue plan, details of which were published last week.

Mr Howlin said a decision on the sale of assets will not be delayed. He said he would put each of the review group's report recommendations to the relevant Government departments and decide as soon as possible how to implement them.

Speaking in the Dáil earlier today Tanaiste Eamon Gilmore said "nobody was in any rush to dispose of State assets."

He added that the Government was open to having a Dáil debate on the issue after Easter in order to "lay to rest the fear mongering" put forward by some opposition TDs.

At a press conference yesterday economist Colm McCarthy yesterday advised against a "fire-sale" of State assets saying it would be unlikely to raise enough capital and may not even be possible given the complex legislation in place. Mr McCarthy said he does not expect to see State assets being sold in the immediate future.

“The Government isn’t under any immediate financial pressure, in the sense that the IMF-EU programme is in place, which means that the Government should be funded for the duration of that programme,” said Mr McCarthy. “We are not suggesting that all of these companies could be put up on eBay tomorrow. It’s a process that takes six months or 12 months or longer.”

Elsewhere, business group Isme called for immediate action to be taken to address the "scandalous" levels of pay and benefits enjoyed by individuals working in semi-state companies.

The move comes after Mr Howlin said that people would be "surprised and shocked" at some of the salaries in semi-State companies identified in the recently published McCarthy report.

The Minister said he intends to initiate a review of pay rates in the semi-State sector, as recommended in the report.