National Treasury Management Agency (Amendment) Bill, 2000: Second Stage.

Thursday, 7 December 2000

Seanad Eireann Debate
Vol. 164 No. 19

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Question proposed: “That the Bill be now read a Second Time.”

Minister of State at the Department of Finance (Mr. Cullen): Information on Martin Cullen  Zoom on Martin Cullen  The purpose of this Bill is to extend [1422] the role of the National Treasury Management Agency to provide for the establishment of a State claims agency, a central treasury service and a fund investment service. The aim of these new services is to make savings and maximise income for the Exchequer.

I will set out for the House later what each of the services involves and how they will operate in practice. First, I would like to outline why it is proposed to establish them under the auspices of the NTMA.

The NTMA was established in 1990 with flexible management structures and suitably qualified personnel to borrow money for the Exchequer and to manage the national debt management at a time when debt management had become an increasingly complex and sophisticated activity. The NTMA has proved successful in managing the national debt. In the performance of its debt management role, the agency has built up a broad range of financial management skills. The proposed central treasury and fund investment services involve the utilisation of these skills. It makes sense to avail of the NTMA's expertise in these areas and provide for the addition of these facilities to the services already provided by the agency.

Turning to the State claims agency, the present arrangements for handling claims against the State are unsatisfactory. A new approach is needed to put in place a structured and coherent response to meet these claims. The choice here is between establishing a new agency to handle claims or to give the task to an existing one. The broad range of skills which the NTMA has built up, supplemented by the particular expertise which claims management requires, will enable it to perform this new function in an efficient and cost effective manner. The agency intends to recruit experienced claims managers who will form the core skill-set in the claims management area as they do in commercial practice. In addition, the agency intends to recruit legal expertise both directly and through the use of a panel of solicitors. An experienced risk manager will also be recruited.

It might assist the House if I detailed some background to the decision to establish the State claims agency. The upsurge in Army deafness claims which took place towards the end of 1995 caused increased attention to be directed at the general question of compensation claims against the State, their cost and how they should be managed. It was argued that the management of claims against the State, centralised in a single agency dedicated to that purpose, would involve the adoption of a proactive approach in seeking least cost settlements in accordance with best practice of claims departments of insurance companies. The main benefits which were seen as arising from the operation of a claims agency were savings in settlement costs and legal charges – to both claimants and the State – resulting from more efficient handling of claims. The risk advice role which a claims agency would assume [1423] would also help to reduce the incidence of claims and thus the overall cost.

Successive Governments looked favourably on the idea, first, directing that draft legislation to establish a State claims agency should be brought forward and later that a claims agency under the NTMA should be considered further. However, the issues involved proved very complex and required extensive consultation with Departments as well as the Office of the Attorney General. This was against the background that there is no general legislative provision for dealing with personal injury or property damage claims against the State onto which proposals for a claims agency could have been grafted.

Extensive discussions also took place with the NTMA on the issues involved and, in particular, on how to deal with certain concerns which arose. Those concerns related to issues such as the scope of the claims to be managed, the funding provisions which should apply and how to give Departments – the clients – an influence in the way the claims functions would be handled. The provisions of the Bill meet these concerns and I am happy to recommend them to the House.

This whole process took longer than any of us would have wished or expected. The drafting of the legislative provisions was also a lengthy process, reflecting the fact that, in this Bill, we are breaking new ground. It is essential that Departments and other State authorities against whom claims are made have an influence on how claims are handled by the agency on their behalf. This will be achieved through their being directly consulted on the general guidelines to be laid down on how the NTMA carries out its claims management functions and through the policy committee on which the Departments will be represented. The policy and general procedures to be followed in handling claims will be subject to the approval of the Minister.

It had been envisaged at an earlier stage that a State claims agency would deal with Army hearing loss cases. However, the strategy adopted by my colleague, the Minister for Defence, has been successful in bringing about a dramatic reduction in the levels of compensation paid in these cases. The Minister has established a pilot scheme specifically for the Army hearing loss claims and it is hoped that most of them can be disposed of under that scheme with considerable savings to the Exchequer. Accordingly, there may not be a role for the claims agency in handling such cases. However, this matter will be kept under review.

I am satisfied that the new arrangements will lead to savings for the Exchequer. It is, however, virtually impossible to estimate the amount of savings which might be achieved. The potential can be gauged from the overall cost of claims. Latest estimates of the costs of the new claims arising, excluding Army hearing loss, amount to £8.5 million per year. The legal costs on this amount could be around £2.8 million per annum.

I do not regard the present arrangements for [1424] handling claims against the State as satisfactory. Society in Ireland is becoming more litigious. Further “class actions”, as in Army deafness, may occur, in addition to the growing number of routine cases. I am strongly of the view that the State must have in place a structured and coherent response to these claims. A more businesslike approach to the settlement of genuine claims is also desirable in the interests of claimants and to secure lower costs in the long run. The provisions of this Bill will achieve these objectives.

I know the agency intends to adopt a commercial approach to claims management – it will not be a “soft touch” for inflated claims or those with little or no merit. I would like claimants, existing and prospective, and their advisers to be clear in that regard. If all concerned realise that, they will be less likely to make or push claims which they know to be less than deserving. I have no doubt, however, that cases will arise which involve sensitive issues or where injury has been caused through negligence on the part of the State. I assure Senators that in situations such as this the agency will deal with claimants in a fair and sympathetic manner.

The agency will also be proactive in the vital area of risk management. The application of sound risk management principles and procedures should ensure that, over time, the frequency of accidents and injuries will decline. They can never, of course, be totally eliminated. One of the tasks facing the agency will be to ensure that Departments have procedures in place to deal quickly and positively with the victims of genuine accidents. Such an approach can often mean that incidents which might otherwise give rise to contentious claims and litigation can be quickly resolved to the satisfaction of all concerned.

The Central Treasury Service proposals will enable the NTMA to offer deposit, overdraft and loan facilities to health boards, vocational educational committees, local authorities and other designated non-commercial State bodies. The objective is to offer such bodies a competitive service in these areas with a view to achieving savings for the Exchequer.

The proposals stem from concerns expressed by the NTMA that the interest paid on short-term surpluses and charged on overdraft facilities along with bank charges represented very bad value compared with the NTMA's capacity to raise or place cash at wholesale money market rates. In order to achieve savings for the Exchequer, the agency suggested that it might offer central treasury services to the non-commercial State sector, aimed at complementing, rather than replacing, existing banking arrangements for the organisations involved.

An interdepartmental group which was representative of the NTMA and the various Government Departments concerned examined these proposals. The group concluded that the interest rates offered and charged by the banks were generally less competitive than rates which [1425] the NTMA could offer. However, the group also noted that some organisations had negotiated discounted bank charges as part of packages requiring them to maintain some minimum level of cash balances and-or overdraft facilities with their banks.

The practice of maintaining certain levels of cash balances or borrowings in return for low transaction processing fees is not necessarily the most cost effective option. Best practice would dictate that the cost of each service should be evaluated separately, with the objective of availing of the most competitively priced combination of services. I can envisage a situation where the NTMA provides the bodies with keenly priced deposit and loan facilities while the banks provided the transaction processing services. The Bill will bring greater competition and transparency in the provision of these services which can only be of benefit to the bodies concerned. It will be necessary for each individual body to weigh up the amount of any additional costs that could arise from any disturbance of existing banking arrangements versus the amount of savings that could be derived from availing of the NTMA facilities.

The interdepartmental group recommended that the National Treasury Management Agency Act, 1990, should be amended to enable the NTMA to offer cash management services to non-commercial State bodies and this recommendation was accepted by Government. The necessary provisions to give effect to this recommendation are contained in the Bill.

Last week the House debated legislation which will make the NTMA manager of the new National Pensions Reserve Fund. In this role the agency will act on behalf of the independent commissioners who will control, manage and invest the fund. The proposed role for the agency under the current Bill is somewhat different. The Bill deals with funds such as the social insurance fund which are managed by Government Ministers and where the Minister concerned has a statutory responsibility to invest the fund assets. The Bill will enable the agency to perform this investment function on the relevant Minister's behalf.

Since the establishment of the NTMA the Government's professional investment expertise has been concentrated in the agency. However, under the National Treasury Management Agency Act, 1990, the agency is restricted to a debt management role. It does not have the statutory authority to manage and invest funds on behalf of the State.

This situation is currently causing difficulties. These difficulties can be illustrated if I describe the situation which has arisen with the social insurance fund. The fund holds the proceeds of employer and employee social insurance contributions and is used to pay social insurance benefits. In previous years, the fund's income was not sufficient to cover the costs of these benefits and had to be subvented by the Exchequer.

Due to the increase in employment and wages [1426] and the decrease in social insurance payments in recent years, there is currently a surplus in the social insurance fund. This surplus is projected to reach £630 million by the end of the year. The Minister for Finance is required to invest this surplus in certain authorised products. These include long-term bonds, short-term securities and cash accounts. However, the risk and investment management systems and skills effectively to manage such a large sum available to the Minister are in the NTMA. The issue is being resolved in the short term with the assistance of the NTMA through investment in NTMA Exchequer notes. This addresses the risk issue through utilisation of the agency's risk management systems. However, this approach is not sustainable in the long term, particularly as the volume of moneys involved increases. Additionally, it does not maximise the return on fund investments as it does not enable investment in higher yielding assets such as long-term bonds. The most sensible solution to this issue is to enable the NTMA to invest the fund directly, utilising the full range of authorised investment instruments, on behalf of the Minister for Finance.

In short, this Bill addresses the anomaly whereby the Government's professional investment expertise which is concentrated in the NTMA cannot be utilised in the investment of Government funds. It enables the NTMA formally to provide a fund investment service where required. It will remain a matter for the Minister in each case to decide whether or not to avail of the service.

The NTMA has, over the past five years, been involved in consultancy projects in Central and Eastern Europe, South America and Asia. In all cases work has been carried out for the ministries of finance in the respective countries. Apart from revenues generated, consultancy work has brought additional benefits to the agency in the form of broadening the skill base of its employees. However, the National Treasury Management Agency Act, 1990, does not formally include a provision to provide consultancy services to parties other than the Government. This Bill formally empowers the agency to undertake such assignments.

I wish to outline the main provisions of the Bill. Part 2 contains the provisions in relation to the State claims agency. In general, the NTMA will be empowered to manage personal injury and property damage compensation claims against the State, Government Departments, Ministers and the Attorney General, community and comprehensive schools and residential centres for young offenders. Claims against other bodies can be assigned to the agency in the future, if it is appropriate and cost effective to do so.

Sections 6 and 7 define a number of key terms used in relation to the management of claims. Section 8 sets out the functions to be performed by the agency in relation to the management of claims and counterclaims. The agency will manage claims and counterclaims to ensure that the [1427] State's liability and associated legal and other expenses are contained at the lowest achievable level. The section also requires the agency to provide risk management advisory services. Where it considers it appropriate to do so, the agency may purchase insurance cover against certain insurable risks.

Section 9 provides for the delegation by Government order of the management of claims or classes of claims to the agency, at the request of Ministers. The section also contains a provision which would allow the Minister for Finance to direct the agency not to begin or to discontinue managing a claim. Such a direction would be made at the request of Ministers where the interests of the State so require.

Section 10 deals with the Attorney General's functions in relation to the management of claims by the agency in so far as his role as legal adviser to the Government is concerned. The agency will perform those functions on his behalf subject to the right of the Attorney General to receive such information as he requests from the agency and to give directions to the agency, where the interests of the State so require. Such directions may include one directing the agency not to begin, or to discontinue, managing a claim. A direction to that effect will, however, lapse after 30 days unless a direction from the Minister for Finance is given or a delegation order is revoked by that date. The Attorney General may also give general guidelines to the agency.

Section 12 provides for the establishment by the Minister of a policy committee which will advise the agency on policy and procedures relating to its claims management and risk management functions. Section 15 provides that the Minister for Finance may issue directions and guidelines to the agency in relation to the performance of its claims management functions.

Section 16 sets out the arrangements which will apply in relation to the payment of settlement amounts or awards due to claimants and to the payment of fees to professional and other experts. The agency will make such payments out of advances from the Post Office Savings Bank fund and will subsequently recoup the amounts involved from the Departments and offices. The Post Office Savings Bank fund is an extra budgetary account of the Minister. It is used primarily to hold and invest the deposits received from the Post Office Savings Bank, but it is also used as an intermediary through which the NTMA conducts certain debt management activities with the markets. It provides a ready-made vehicle for the funding of settlements and the payments of fees.

Part 3 contains the provisions in relation to the central treasury services. Central treasury services are defined as the taking of deposits from and the making of advances to local authorities, health boards, vocational education committees and other non-commercial State bodies. These other bodies may be prescribed by order.

Section 20 authorises the Minister to provide [1428] central treasury services to non-commercial State bodies and also provides that such bodies may choose to avail of the service at their own discretion. Section 23 enables the Minister to delegate the operation of the central treasury service to the NTMA while section 25 provides that the Minister may issue directions or guidelines to the NTMA in relation to its performance of the function.

Section 22 provides that the central treasury service will operate on the Post Office Savings Bank fund. As with the settling of claims by a State claims agency, the fund provides a ready-made vehicle through which central treasury services can be provided.

Section 26 provides that vocational education committees may place funds with more than one financial institution and also utilise the central treasury service. At present, vocational education committees are precluded from banking with more than one bank which prevents them from seeking the best value available on surpluses which may arise on their accounts from time to time.

The provisions in relation to the fund investment service are set out in Part 4 of the Bill. Funds invested by the Minister and funds invested by other Ministers are dealt with separately. Section 28 provides that funds invested by the Minister for Finance may be delegated to the agency by ministerial order. Section 29 provides that the NTMA may act as an agent of another Government Minister in the performance of his or her investment functions under terms and conditions agreed between the Minister and the agency.

The NTMA was established in 1990 as an innovative solution to a particular problem which existed at that time. In the performance of its primary task of debt management the agency has developed a number of competencies and skills which can be usefully employed to the Exchequer's advantage in other areas. This Bill allows the NTMA to build on the strengths it already possesses as a debt management agency and to use its expertise to provide further financial and risk management services to the State. I commend it to the House.

Mr. J. Doyle: Information on Joseph Doyle  Zoom on Joseph Doyle  I welcome the Minister of State to the House. It is not often that two items of legislation pass through the Houses of the Oireachtas side by side concerning the same agency. This has happened with the National Treasury Management Agency – last week we dealt with the National Pensions Reserve Fund Bill which has the NTMA as the manager of the fund and today we are dealing with legislation which sets out to radically expand the role of the NTMA.

As the Minister of State stated in his speech, the NTMA was set up in 1990 to manage the national debt. This was done at a time when the management of the national debt was a significant issue for the Government. At that time the [1429] debt to GNP ratio was in excess of 120% and rising annually as public sector deficits were large. Financial markets were a lot less benign than today, interest rates were very high and there was much greater volatility on currency markets.

The management of the national debt was a primary consideration of the State's economic policy. The objective of transferring responsibility for managing the national debt from the Department of Finance and central Government to the newly established NTMA was to concentrate expertise in the new agency, attract additional expertise from the private sector and bypass the State's salary structure. The going rate for the relevant expertise in the financial market was substantially above pay levels in the State sector at that time. As well as managing the national debt the NTMA was given responsibility for managing the State's savings products. An example of these was the saving certificates that were sold through the post office system.

The NTMA has done an excellent job in managing the national debt. I wanted to say that before Senator Ross arrives because he totally disagrees with that point of view. Although the national debt remains as high as ever in monetary terms, it has rapidly declined as a percentage of GNP, particularly in recent years as the economy has grown rapidly. The debt to gross domestic product ratio is forecast to reach 45% this year, almost one-third of what it was in the late 1980s. This improvement was achieved on the back of the recent boom and this significant reduction means that the Irish Republic has the fourth lowest debt to GDP ratio in the EU at present. This contrasts very favourably with the difficult days of the 1970s and 1980s when successive Governments borrowed funds in an attempt to spend their way out of recession. They were probably successful in doing that given the figures the Minister for Finance produced yesterday.

It is now the intention under this Bill to extend the role of the NTMA to provide for the establishment of a State claims agency, a central treasury service and a fund investment service. The NTMA is a good place to vest the new responsibilities for a State claims agency. This is an opportune time to establish such an agency because this nation seems to be becoming very fond of litigation, not just at national level but at local level. I am sure the Cathaoirleach will agree with me on this point.

This week Dublin Corporation is considering its estimates under some stress and it pains me that we must provide £6 million to meet compensation claims. This figure is substantially reduced from other years because the local authority has put in place a proactive unit to monitor and examine these claims. Local authorities are very anxious to provide better services for their communities but we are curtailed in doing so because we must pay outlandish sums in compensation. The Minister for Finance might take note of this and see if it is possible for the new agency which [1430] will look after State claims to take an interest in large claims made against local authorities.

The main feature of this legislation is that section 8 imposes a mandate on the agency to contain claims. Up to now a large number of claims made against State agencies went to a full hearing. This is contrary to the practice in the private sector where claims are made against insurance companies and they are generally anxious to settle at an early stage. It is in the interest of the claimant and the person making the payment to settle early because it substantially reduces the cost and publicity involved.

A very high percentage of State claims go to trial. One of the reasons for this is that the heads of Departments, against whom the claims are lodged, are very reluctant to settle because they are afraid to do so without the protection of the courts. The setting up of the new agency will get over this difficulty as the agency will take the responsibility for the settlement of claims. The agency already has the financial expertise. It can make actuarial estimates and decide when is the best time to settle and what are the most suitable terms. In the long term most claims must be settled on a legal basis. I am sure that the agency will have to recruit experienced barristers and solicitors to assist it in this type of work. Am I correct in understanding that litigants who do not wish to accept the decision and offer made by the agency have the right to go to the High Court with their claim?

Quite a number of class actions have been taken against the State. For example, the Army deafness claims. There is a possibility that legal action will be taken by adults who were abused while they were in the care of the State as children. The State will now be in a better position to redress these claims and any claims brought against it. The present arrangements for handling claims against the State are totally unsatisfactory. The proposals made in this legislation will put in place a structured and coherent response to meet these claims.

I agree with giving the NTMA the additional role of a fund investment service. The most obvious recipient of this service is the management of the social insurance fund. I was surprised, like many other Senators, to find out that this fund now has a surplus of £630 million. It would have been an ideal fund to invest in the new pensions fund initiated by the Minister. However, I accept that he gave coherent reasons on Second Stage why this should not happen.

It is right that the NTMA should be given the role of managing surplus funds in the insurance fund and any other funds that may be available to the State. Also included are any surplus funds that local authorities may have. I very much doubt that local authorities have surplus funds to invest to that degree.

In the area of cash management, local authorities have a very good working relationship with their banks and are very active in the management of their own cash flow arrangements. A [1431] survey carried out a few years ago indicated that local authorities were conducting this business very efficiently and there was no need for another agency to become involved in this activity.

Currently, local authorities receive a very good discount rate in regard to the application by banks of commercial charges for the operation of their accounts. It could be expected that the full rate of charges would be applied if the cash management role of local authorities were transferred to the NTMA. The centralisation of this function would remove another independent function of local authorities and contribute to a lessening of local democracy. There is no justification for giving this role to the NTMA, unless it is done on a voluntary basis.

With these reservations, I welcome the principle of this Bill. It is long overdue and I am pleased we are discussing it today. It makes a great deal of sense and will allow matters to be managed in a more organised fashion in future. I support the Bill.

Mr. Finneran: Information on Michael Finneran  Zoom on Michael Finneran  I welcome the Minister of State and I commend the Bill, which is an endorsement of, and a vote of confidence in, the National Treasury Management Agency. This fortnight two pieces of legislation have come before this House to extend the powers, responsibilities and scope of the services provided by the National Treasury Management Agency.

The agency was set up in 1990 to deal with the particularly severe national debt we had at that time. Irrespective of the criticism levelled at the agency last week in this House, I feel it has done an excellent job over the years. I appreciate that the criticism was not voiced by the Opposition spokesman on finance, Senator Joe Doyle, but by another Senator. The agency has been a success. Europe is envious of our present debt ratio. This Bill is a vote of confidence in that agency, and the increased scope of its services is welcome.

The Bill covers three areas which give new powers to the agency. The State claims agency, a new facility being provided for in the Bill, is welcome. We now live in a claims culture where litigation is the order of the day. It is appropriate to centralise our response. However, we must also protect the public right to claim against the State if it has in any way wronged or injured one of its citizens. I understand that right to go to the courts is enshrined in this Bill, which I would like the Minister to confirm in his response.

Recent times have seen massive claims against the State, which I believe will continue in the future. That is now the frame of mind of the country and there will be an increase rather than a reduction in the number of claims against the State. The processing of these claims has become extremely costly. This measure is an important one and will prove to be beneficial. The National Treasury Management Agency is the right body to deal with this matter.

[1432] Last week we gave the NTMA another vote of confidence by handing it a £5 billion pension fund to manage on behalf of the State. Irrespective of what was said here last week, I believe the agency has the expertise to do that. That was confirmed today by the Minister – although it was, perhaps, not confirmed last week – when he said it is already providing consultancy services outside the State and that its services have been availed of by ministers and departments of finance around the world.

It was alleged here last week that it was a debt management agency and had no expertise in regard to investment. I do not believe that to be the case. The decision we took last week to make provision in law for the agency to deal with the reserve pension fund was an excellent one and I have no doubt it will do an excellent job.

Today we are expanding the scope of the services of the NTMA even further. The first of those is a State claims agency, which is an important step. The facility to deal with the finances of local authorities, health boards and so on will bring competition into this area. At present, those bodies must deal directly with the banks. The local authority of which I am member sent a special resolution recently to the bank seeking better terms. We did not get better terms but we had nowhere else to go and had to take what was offered at that time. If a local authority is not satisfied with its bank it can now go to this agency, but there is no compulsion on it to avail of these services. That also applies to health boards and designated non-commercial State bodies. That is an important area of loan facility and finance management.

I had not thought much about the area of investment by Departments. However, I see that by the end of this year the social insurance fund will have a credit balance of approximately £630 million. There was a need for a tier of this agency to deal with such a large investment, which will probably increase.

It is an endorsement of our public finances that we have reached a situation where the social insurance fund will have a credit balance by the end of the year of £630 million. Who would have thought ten years ago that that would be the case? At that time, we were providing amounts from the Exchequer to supplement that fund. We are now in a situation where we can invest the contributions of employers and employees, through this agency, for the future needs of the citizens in such areas as disability payments, unemployment benefit and so on.

This is an important day in the management of this country's financial services. The decision taken in 1990 was an important one and has proved very successful. This agency is now moving forward, on an incremental basis of confidence, on behalf of the State.

This Bill has provision for those three matters to which I referred. The consultancy services the agency is providing will expand dramatically, with the extension of its powers under this Bill. Its [1433] expertise might not be known internationally, as it might have been perceived as a debt management agency. However, the fact that we have shown confidence in it by handing it the pension reserve fund last week and are giving it responsibility in this Bill under the three headings I mentioned will send the right signals on behalf of the agency, both nationally and internationally.

I welcome the Bill and compliment the National Treasury Management Agency on the excellent work it has done on behalf of the country over the past ten years. It has the expertise to go forward under the new responsibilities given to it. I have every confidence that it will deliver and save the nation, including many State bodies, local authorities and health boards. I commend the Bill and thank the Minister of State for introducing it.

Mr. Quinn: Information on Fergal Quinn  Zoom on Fergal Quinn  I wish to share my time with Senator Ross. Is that in order?

An Leas-Chathaoirleach:  If he appears.

Mr. Quinn: Information on Fergal Quinn  Zoom on Fergal Quinn  I welcome the Minister of State at the Department of Tourism, Sport and Recreation, Deputy Ryan. We are used to one of the Deputy's family being a Member of this House.

Mr. J. Doyle: Information on Joseph Doyle  Zoom on Joseph Doyle  The Minister of State at the Department of Finance, Deputy Cullen, was also a Senator.

Mr. Quinn: Information on Fergal Quinn  Zoom on Fergal Quinn  That is correct. I am in favour of one part of the Bill, but am opposed to another part. I disagree with the notion of making the National Treasury Management Agency the State claims agency. There is no evidence that the NTMA has any relevant experience in the field of dealing with claims against the State. The Minister of State, Deputy Cullen, said a more business-like approach to the settlement of genuine claims is desirable in the interests of claimants and in securing lower costs in the long run and that the Bill would achieve these objectives. I doubt if that will be achieved here.

The extent to which the Minster for Finance is an NTMA fan is an urban legend. If there is a need for a State claims agency – perhaps regrettably there is – a small dedicated unit of relevant professionals is called for. To make an analogy with the Roman emperor Caligula, who made his horse a consul, the thinking appears to be that because there is the NTMA the State claims agency should be included under its remit. A unit should be established for the purpose of claims handling and it should be disbanded as soon as it is no longer necessary.

I disagree with Senator Ross in that I am prepared to believe that the NTMA has done an excellent job since it was established. While it may be excessively concerned with blowing its own trumpet – Senator Ross's point – it has a very good tune to play. However, whether it does [1434] its job well or badly, there is no doubt about the nature of the job, which is the treasury function of managing the funds to get the best return.

The treasury function calls for highly specialised and extensive expertise. Therefore, it makes good sense to extend the scope of the NTMA to include all funds in the wider area of Government, rather than to merely manage the national debt, which was its original purpose. Shortly after I first became a Member of this House in 1993 I argued that we should turn over the then huge debt of NET to the NTMA in the interests of having it professionally managed. Had that been done the State would have saved an enormous amount of money. Even today we are still not finished picking up the pieces from NET.

It is not a leap to extend the function of the NTMA from managing the national debt to providing similar treasury services to a whole range of other public bodies. It is a slightly bigger leap to give to the NTMA the management role on the national pensions reserve fund, although it is one that can be made. Arguably the NTMA's expertise is in managing bonds rather than equities.

However, I draw back in horror by the size of the leap involved in giving the NTMA the powers to become the State claims agency. Nothing in the history of the organisation or in its expertise equips it to perform that role. The gap is too big to breach, no matter what the Minister may say. I am in favour of not multiplying the number of State bodies unnecessarily, but that should not extend to running together two bodies with two completely disparate functions. This is one case where we need horses for courses.

The Solicitors (Amendment) Bill, 1998, was initiated in the Seanad where it passed all Stages in a businesslike manner. It was presented to the other House where it passed Second Stage and was then transferred to a legislative committee. The purpose of the Bill was to restrict the practice of solicitors touting for business for personal accident claims. It was agreed at the time this was the prime cause of the rising number of claims against the State.

When I was at school I read about the Marie Celeste, a ship that disappeared in the oceans and was found empty. Nobody knew what happened to it. The Solicitors (Amendment) Bill disappeared after it was referred to committee. Yet, as this Bill demonstrates, the problem it sought to address has not gone away. This Bill focuses on settling claims whereas the previous legislation aimed to address the problem at its roots by ensuring that there was no encouragement to make claims. Does this mean the State has lost interest in trying to stem the number of claims and is resigned to being taken for a ride by whoever wishes to claim against it?

It is interesting to contrast the fate of the two Bills. This Bill is being rushed through the legislative process and will probably be on the Statute Book next week, certainly before Christmas. The other Bill, which goes more to the root of the [1435] problem, continues to be in a legislative limbo more than two years after publication. While I welcome this Bill, I have grave doubts about the wisdom of including under the very efficient NTMA – I am sure Senator Ross disagrees – a national State claims agency. Let us think again on this.

An Leas-Chathaoirleach:  I call Senator Ross. Are you sharing your time or exercising your full entitlement?

Mr. Ross: Information on Shane Peter Nathaniel Ross  Zoom on Shane Peter Nathaniel Ross  I will do both if I may. I will exercise my full entitlement, but I will keep within the time remaining.

An Leas-Chathaoirleach:  Is that agreed? Agreed.

Mr. Ross: Information on Shane Peter Nathaniel Ross  Zoom on Shane Peter Nathaniel Ross  When I asked about this Bill this morning I was assured by the Leader that a Minister from the Department of Finance would be present. Deputy Ryan, who is a fine Minister, is from the Department of Tourism, Sport and Recreation.

Mr. Finneran: Information on Michael Finneran  Zoom on Michael Finneran  The Minister for Finance was here.

Mr. Ross: Information on Shane Peter Nathaniel Ross  Zoom on Shane Peter Nathaniel Ross  The Minister for Finance was not here. It was the Minister of State at the Department of Finance, Deputy Cullen. I am sick and tired of Bills being put through this House and Ministers being sent in here to baby-sit, which is what it is known as, the Members and Bills in this House. It is unfair on this House because this is the third time in a week this has happened on important Bills. It happened on the ICC Bank Bill last week when the Minister of State at the Department of Education and Science, Deputy O'Dea, was here, although the Bill did not emanate from his Department. It also happened on the National Pensions Reserve Fund Bill last week when the Minister of State at the Department of Enterprise, Trade and Employment, Deputy Treacy, was here, although that Bill did not come from his Department. He took Committee Stage, which is a matter of great detail. I am sick and tired of this happening.

I do not blame the Minister of State, Deputy Ryan, and he must not take it the wrong way. Perhaps it would be all right if this was the only time and there was an extraordinary and good excuse why the Minister for Finance is involved in other things, such as the budget, but he has two Ministers of State and neither of them can be in this House because they have more important things to do. The business of this House should be ordered when the Minister or Ministers of State can be here. It should not be ordered willy-nilly.

As a mild protest, I have no intention of contributing to this Bill now because I know there is no Minister here who is authorised to listen and take action on it. This will continue. While all [1436] Stages of the ICC Bank Bill were rushed through last week because there was an EGM the next day and it would be sold the following week, this Bill must go through for other reasons. I know that anything I say today will not carry any weight or make any difference and it will not persuade any Minister to amend it on Committee Stage or any other Stage. I am tired of it.

I do not want to speak to a Bill when a Minister is here from the wrong Department. I realise it will be inevitable but it is time people outside this House realised it is being treated badly. Ministers are sent in here willy-nilly. It depends on who is available, not on who is suitable to take the Bill. I do not doubt that the Minister of State, Deputy Eoin Ryan, would be capable of taking this Bill through the House. However, it is time we had the right Minister at the right time in the right place.

Minister of State at the Department of Tourism, Sport and Recreation (Mr. E. Ryan): Information on Eoin Ryan  Zoom on Eoin Ryan  I apologise on behalf of the Minister. He was told the Bill would be taken at 12 o'clock today. He was speaking in the other House when a sos was taken and had to get back into the other House to continue his speech or the business would not have been able to continue. He apologised because he realised it could irritate some Senators. However, there was nothing he could do about it because he had to go back into the other House.

Mr. Ross: Information on Shane Peter Nathaniel Ross  Zoom on Shane Peter Nathaniel Ross  We could have adjourned and come back or taken it on another day.

Mr. E. Ryan: Information on Eoin Ryan  Zoom on Eoin Ryan  That is a matter for the House.

Mr. Ross: Information on Shane Peter Nathaniel Ross  Zoom on Shane Peter Nathaniel Ross  I agree.

Mr. E. Ryan: Information on Eoin Ryan  Zoom on Eoin Ryan  The Minister thanked Senators for the contributions they made and the points they raised which he intends to address on Committee Stage. He was interested in the points made.

On the question of whether the NTMA is the appropriate place in which to locate the State claims agency, Senator Quinn made the point that its expertise lies in the financial area and that it has no expertise in dealing with claims management. The same can be said of any other existing agency, which might be given a claims management function, or any newly established independent body. The NTMA's expertise is in the financial area, given that its main areas of activity are borrowing and debt management. However, as the Minister of State said in his speech, he has no doubt that the broad range of financial skills which the agency has built up, supplemented by the particular expertise which claims management requires, will enable the agency to perform this new function in an efficient and cost-effective manner.

I thank Senators for the points they made.

Question put and agreed to.[1437]

An Leas-Chathaoirleach:  When is it proposed to take Committee Stage?

Mr. Finneran: Information on Michael Finneran  Zoom on Michael Finneran  Next Wednesday.

Committee Stage ordered for Wednesday, 13 December 2000.

An Leas-Chathaoirleach:  When is it proposed to sit again?

Mr. Finneran: Information on Michael Finneran  Zoom on Michael Finneran  Next Wednesday at 2.30 p.m.


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