Government increases An Post’s Statutory Borrowing Limit - why?

SPEAKER_1 (0:00)

The Hard Shoulder, with Ciara Kelly and Shane Colman, on Newstalk, with Kiya.

Shane Coleman (0:09)

Now we are joined by Charlie McConalogue, Minister of State at Department of Tourism, Culture, Arts, Gaeltacht, Sport and Media, with special responsibility for Sport and Postal Policy. Minister, thank you indeed for joining us. Can I ask you first off about the government's approval to increase the An Post's statutory borrowing limit? It's quite a chunky increase.

An Post will now be able to borrow up to 620 million from just 75 million. What's the thinking behind that?

Charlie McConalogue (0:41)

Yeah, good evening, Shane. And you're right, it is a significant increase, but an important and proportionate one. And An Post's borrowing limit hasn't increased since it was first established under the Postal and Telecommunications Act in 1983

And at that time, it had a borrowing limit of 58 million pounds, which in today's money is 74 million euro today. But as a result of there being no increase, what we want to do now is ensure, from a government point of view, that we support very strongly the really important role that An Post plays in people's lives and in the country's life, and ensure that it can, it is in a place to be able to meet new modern opportunities and to be able to innovate its business and have the financial capacity to be able to do that. And just at the outset as well, just want to recognise the massive work, there's 10,000 employees of An Post right around the country and who do immense work and do it with good grace at all times as well, and they're the backbone of the company. But we want to ensure that the company continues to thrive in a context where we've seen normal traditional post-significant re-reduce over and will continue to reduce, no doubt. It's been down by a half, standard letters are down by a half, for example, over the last decade. But there is real opportunities there. And for example, last year, while postal normal posts would have dropped by 7%, we saw parcel business increase by 75% in 2025 So we want to ensure now that An Post is equipped to be able to embrace those opportunities and ensure that they can continue to provide a really good service to people throughout the country.

Shane Coleman (2:11)

Does that include, I know there's been some speculation about the need for a new parcel hub. You mentioned that 75% growth in parcels. My understanding is the company's almost at full capacity in terms of its current parcel infrastructure. Will this allow them to do that?

Charlie McConalogue (2:28)

It allows two things.

For example, in relation to new properties or capacities to be able to deal with the traffic they have, it enables them to be in a position, for example, to get the best possible deals in terms of any properties or that they might need to acquire to be able to do their business. So there's the capital side in terms of being able to borrow long term at good rates in the way that best supports the business. But also then there's also the ongoing cash flow capacity of An Post and it's now reached An Post just over for the last two years running over 1 billion euro in annual revenue. So when you look at the new borrowing limit of 6, the increased borrowing limit of 620 million in the context of that 1 billion annual turnover, it's not as significant as it might sound. But it is important given the changing nature of the business that An Post operates in, that they have the cash flow capacity. For example, that the parcel business would be a much more credit-based model than the traditional letter post. As we all know, when we would have been posting our letters, we would have bought our stamp. When you're posting a letter, you buy the stamp in advance. But when you're dealing with a lot of e-commerce and parcel business, you have to have the capacity to be able to run a credit-based model more so too. So it enables them to be able to do that as well.

Shane Coleman (3:40)

OK, can I ask you about a few other things that are happening today? I don't know how much time you had to look at Sinn Fein's proposal for long-term residency permits as an alternative to citizenships.

But I think a lot of focus will go on Sinn Fein's proposal to reform rules. It would see advantages offered to those who learn Irish, including a potential reduction in their residency requirement periods before becoming citizens. What do you make of that proposal?