What price for our national family silver?
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CAN sales of state assets -- "selling off the family silver" -- help us in any substantial way to reduce the yawning deficit in the Government's finances and give us a leaner and more vigorous future? Clearly the European Union and the International Monetary Fund think so.
Proposals for such sales were in the air long before the EU-IMF bailout, but they have taken on added force since the deal was concluded. They have featured in other bailouts. For example, the EU and IMF want Greece to raise no less than €10bn in this manner.
Now Colm McCarthy, the eminent economist commissioned by the outgoing government to examine the question, has sent detailed proposals to the new Government. They include some ingenious ideas.
Coillte, the state forestry company, could sell the growing trees but not the land they grow on. Similarly, Bord na Mona could sell the rights to extract the peat but keep the land underneath. Later, the two companies -- or a single merged company -- could stay in business, albeit engaged in different activities. Let us hope that these activities would be profitable.
All this not only accords with the views of the EU and the IMF but makes excellent sense. There is no obvious reason why the State should be involved in forests or bogs, any more than in growing vegetables or breeding cattle.
But many difficult questions remain, and the bigger the company involved, the harder the question.
Far more valuable than Coillte or Bord na Mona are the ESB and Bord Gais. Would selling all or part of them make a radical difference to the Government's finances? Possibly, but the Government must not underestimate the problems that will arise.
Would such moves help us to achieve an efficient energy market? That is impossible to answer at this stage.
What of the huge deficits in several of the state companies' pension funds? Will the burden fall, as usual, on the taxpayers?
Will a slimmed-down system produce the efficiencies, and the new outlook, that we need so urgently? And does a Fine Gael-Labour coalition have the political will to carry the process through?
Our "family silver" is badly tarnished. But powerful vested interests want to keep it that way. At worst, reform could lead to full-scale confrontation with the trade unions.
The Government must ensure that it acts on the basis of a fully comprehensive, workable plan.
Irish Independent
