Coalition at one on core proposals by McCarthy

ANALYSIS:State disposal of some assets and close review of pay levels within operational arms has been generally endorsed by Howlin

THE MOST striking thing about the Government’s response to the McCarthy report’s proposals for the sale of State assets was the commitment by Minister for Public Expenditure Brendan Howlin that it would not be long-fingered.

The cynics had expected that the Labour Party would follow the trade union line and do its level best to resist the proposal to dispose of billions of euro worth of State assets.

Instead, Howlin responded positively, voicing the opinion that there were “lots of good ideas” in the McCarthy report. While he was not prepared to make any firm commitments yesterday about which of those “good ideas” would be adopted, he made it clear that they were going to be taken seriously.

While rightly saying there would be no fire sale of State assets, Howlin made no bones about the commitment in the programme for government to the concept of disposing of some State assets to raise money to invest in job creation.

He also refused to duck the question of pay in the semi-State sector, accepting that there would have to be a review of pay levels, particularly at senior levels, to ensure fairness and solidarity across the board as the country struggles to get itself out of the mire.

One of the most positive features of the Fine Gael/Labour coalition since it took office less than two months ago has been the unity of purpose displayed by both parties as they begin to square up to the horrendous problems facing the country.

Many people had feared a rerun of the tension and ideological wrangling that bedevilled the Fine Gael/Labour coalition of the 1980s and hampered the effort to get to grips with the last great economic crisis faced by the country.

This time around, it has been very different – at least so far. Taoiseach Enda Kenny has managed to strike a confident, upbeat note from day one and there has been no sign of disharmony between him and his Labour Ministers.

Initially, the Labour Ministers did seem a bit taken aback at the sheer scale of the economic and financial crisis and the constraints under which they have to work as a result of the EU-International Monetary Fund bailout. But there was no descent into immediate squabbling over budgetary policy as happened when the two parties took office at the end of 1982.

The creation of an economic council composed of the Taoiseach, Tánaiste Eamon Gilmore, Minister for Finance Michael Noonan and Minister for Public Enterprise Brendan Howlin has clearly given the Coalition a strong bond at its core. That bond will be tested in the months and years ahead but getting off to the right start was half the battle.

While the age of the Cabinet (many of whose members are in or around 60) has generated some negative comment, this could actually prove to be a real strength. Not only are the key figures like Kenny, Gilmore, Noonan, Howlin and Rabbitte all vastly experienced, they are at the stage of their political careers when they have nothing left to lose by throwing caution to the winds and doing the right thing by the country, regardless of the electoral consequences.

One of the obvious lessons of the Nyberg report is that leading politicians have to stand back from the variety of vested interests that seek to ensnare them and govern in the interests of the country as a whole, rather than sectoral interests.

In his response to the McCarthy report, Howlin has reinforced the impression he has given from the start that he intends to deliver on the promise of public service reform contained in the programme for government rather than seeking to obstruct it.

He referred to the issue of pay in the semi-State sector and accepted the McCarthy recommendation that a comparison should be undertaken of pay and conditions in all commercial State companies with those elsewhere in the Irish labour market and also with those in competitor countries, particularly the United Kingdom.

McCarthy has identified a notional €5 billion in State assets that could be realised and, while there will be no rush to make quick disposals, decisions would need to be made soon if some assets are to be sold next year.

One issue that will have to be sorted out is whether the money raised through asset sales will be used to invest in jobs or to buy off some of our debt as the EU-IMF programme envisages. Some form of compromise on this issue is sure to be negotiated.

Both Howlin and McCarthy have ruled out fire sales and the disposal of strategic State assets. Within those constraints, however, the Minister accepted that €2 billion could be raised through disposals, in line with the commitment in the programme for government.

The Government would also be well-advised to take another piece of advice offered by McCarthy yesterday when he cautioned against spending vast amounts of money we no longer have on the major infrastructural projects outlined in the National Development Plan. Metro North is one obvious example.