The Government must allow an “open and transparent” debate on how Ireland will spend Nama’s €3bn predicted surplus before it becomes available at the end of the decade.
Public Accounts Committee (PAC) chairman and Fianna Fáil TD Sean Fleming urged the action as he warned that the Government may make a “covert” attempt to spend the money on slashing the national debt instead of on a series of growing financial and social crises gripping the nation.
At a recent PAC meeting earlier this year, Nama chairman Frank Daly and other Nama officials confirmed the agency is due to benefit from the surplus by 2020 from its dealings in the property market.
The €3bn sum will, at that point, be transferred back to the exchequer, with the Department of Finance tasked with how it should be spent.
While the surplus money is not due to be made available for another three years, the reality that it will eventually be provided means that Government will earmark certain issues for the additional spending in the coming budgets.
However, Mr Fleming said it is vital that the post-2020 spending decisions are not made by the department alone, and that an “open and transparent” discussion begins now on how the money should be spent.
“I raised this matter with the Department of Finance at a recent PAC meeting, and they confirmed that Nama as an agency is unique in the European context, in that there are no specific European or Eurostat rules as to how these surplus funds can be utilised,” said Mr Fleming.
“Therefore it will be up to the Irish Government to decide on the best use of these funds. This has also been confirmed by the finance minister.
“The Government needs to set out the options available, including; a reduction of the national debt, a contribution to the rainy day fund, housing and/or other infrastructure purposes; or a combination of these options.
“I am concerned that this Government may make a covert decision to use the entire surplus to reduce the national debt. This is only one option and I believe that a full and broad debate on the issue is needed.”
While the way in which the €3bn surplus is spent is not on the immediate agenda, the issue is likely to receive growing attention in the lead-up to this year’s budget due to the knock-on effect it will have on spending plans for the coming years. This is because while money is available to increase funding for pensions, housing, health, Brexit protection measures, and other matters, where the €3bn Nama surplus will go will mean some areas may receive less funding than expected until 2020 before the extra money comes on-stream.
In addition, both Fine Gael and Fianna Fáil are heavily focussed on spending measures over the coming years due to the fact budget issues remain a central part of their confidence and supply deal.
Although officially the agreement includes a stipulation that Fine Gael shares its budget proposal plans with Fianna Fáil in the lead-up to their formal announcement, the deal was stretched last year when Fine Gael found extra money on the eve of the 2017 budget — putting Fianna Fáil at a significant disadvantage.
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