Proceeds of AIB sale and political choices

 

Sir, – Your recent editorial (June 1st) suggests that the issue of the sale of AIB shares should not be confused with the need for additional capital investment.

Perhaps that is so – but the attraction of a change to European rules to allow for one-off cash windfalls to be spent on largely non-recurring expenditure is obvious, and the benefits could be significant.

Seeking such a change might, for example, have kick-started the non-existent Government campaign for greater flexibility in the fiscal rules to facilitate the sort of additional capital investment supported in your editorial.

What your editorial does not take a position on is the purported rainy day fund that is set to consume €3 billion of resources between 2019-21.

As this spending is already within the contemplated fiscal space there is no reason why it cannot be diverted for investment purposes. Indeed now that the Government will use the AIB proceeds to minimise their cash requirements and reduce our debt levels, there is even less reason for the rainy day fund, certainly in the short term.

The current capital review is being conducted with only €2.6 billion additional resources to commit. That’s not even sufficient to support the Sláintecare proposals.

Meanwhile the Government has a further €3 billion available over the lifetime of the current capital plan but chooses not to commit it at a time when our debt position continues to improve.

That’s a political choice.

Just as the decision not to fight to invest the proceeds from the sale of AIB was. – Yours, etc,

BRENDAN HOWLIN TD,

Leader of the Labour Party,

Leinster House,

Dublin 2.