Dáil Éireann Debate, Thursday - 4 May 2023
148. Deputy Colm Burke asked the Minister for Finance if he will consider opening an emergency fund for further future unforeseen events that may hit Ireland's economy and hurt its businesses; and if he will make a statement on the matter. [20945/23]
View answerLast year, a large budgetary surplus of €8 billion was recorded. Absent any major shocks to the economy or our public finances, a large expansion of this surplus is projected for the years ahead. However, this headline position is flattered by the extraordinary rise in corporation tax receipts in recent years. My Department estimates that, last year, more than half of corporation tax receipts were windfall in nature – meaning that they cannot be explained by our economic fundamentals.
When I came to office as Minister for Finance, I asked officials in my Department to prepare a scoping paper outlining the merits of establishing a longer-term public savings vehicle to which these windfall receipts could be channelled and which would contribute to the long-term sustainability of our public finances. Such a vehicle could contribute to identifiable future costs, such as those relating to an ageing population, as well as less quantifiable spending pressures, such as the climate and digital transitions. The fund could also help contribute to meeting the cost of unforeseen shocks, such as those we have experienced in recent years.
An existing fund, which serves a useful purpose in providing resources to meet unforeseen events, is the National Reserve Fund, which currently holds €6 billion. However, I believe a more ambitious approach is needed to meet the future fiscal challenges which lie ahead and my Department’s scoping paper explores options in this regard.
Taking into account this analysis, it is my intention to continue to develop the proposal to establish a longer-term savings vehicle, capitalised by windfall receipts, with a view to bringing proposals to Government providing for the establishment of this fund in due course.
