That Dáil Éireann authorises the Minister for Finance, pursuant to section 6(1) of the National Surplus (Reserve Fund for Exceptional Contingencies) Act 2019 (the ‘Act’), not to pay the prescribed amount (€500,000,000) under section 5(2) of the Act into the National Surplus (Exceptional Contingencies) Reserve Fund for the year 2021 having regard to the fact that in accordance with section 6(3) of the Act the Minister is satisfied that, by reason of the exceptional circumstances posed by the public expenditure undertaken to remedy or mitigate the impact of the COVID-19 virus, the payment of the prescribed amount would place an undue burden on the public finances.
The motion relates to section 6 of the National Surplus (Reserve Fund for Exceptional Contingencies) Act 2019, which established the National Surplus (Exceptional Contingencies) Reserve Fund, more commonly referred to as the rainy day fund. The Act was commenced on 31 October 2019 and the fund was subsequently seeded with €1.5 billion transferred from the Ireland Strategic Investment Fund, ISIF, on 15 November 2019.
Today, I am seeking the Dáil's endorsement for a motion not to transfer the €500 million contribution for 2021 into the National Surplus (Exceptional Contingencies) Reserve Fund. Deputies will be aware that, under section 5(2) of the National Surplus (Reserve Fund for Exceptional Contingencies) Act 2019, the Minister for Finance is required to make a payment from the Exchequer of €500 million to the rainy day fund every year from 2019 to 2023. The Act also provides, under section 6, that in any given year the Minister for Finance may make a proposal to the Dáil not to transfer the €500 million contribution into the fund. I am proposing the motion that the Minister for Finance not transfer €500 million into the rainy day fund in 2021, following Cabinet approval on Wednesday, 27 October last.
The motion is before the House because the Minister for Finance is satisfied that, by reason of the continuation of the exceptional circumstances posed by the pandemic and the consequential public expenditure undertaken to remedy or mitigate the impact of Covid-19, the making of the payment of the prescribed amount would place an undue burden on the public finances. As everyone in the Chamber is aware, 2021 has seen the continuation of unprecedented challenges to the State in terms of the Covid-19 pandemic. As anyone would expect, the Irish people and, for its part, the Government acting in their name, have continued to respond to these challenges with steadfast resolve while deploying massive resources. The last one and a half years have been extraordinarily difficult for all, with disruption to family life, the pain of losing loved ones and the impact of successive, but necessary, public health restrictions all hindering, in an unprecedented way, normal economic and social life.
Despite this, throughout the pandemic, we have all witnessed the incredible resilience of the Irish people. Ordinary people, business owners and especially our front-line workers have risen to the challenge in an extraordinary way. In particular, I am sure that everyone in the Chamber will join me in acknowledging all those who supported and partook in our vaccination programme. It gives me an enormous sense of pride to say that this vaccine programme has been one of the most successful in the world. It is the key reason we are returning to greater degrees of normality. Given these facts, we all owe a huge debt of gratitude to the staff and volunteers involved across the relevant agencies.
The Covid-19 pandemic has clearly highlighted the role of Government in supporting both our economy and society. While the response from the Government was unparalleled, with over €48 billion provided over three years, it was also completely necessary. Approximately €41 billion of this, or nearly one fifth of national income as measured by GNI*, was made available in 2020 and 2021. This included direct public expenditure, tax expenditures and “below the line” supports such as loans and guarantees, including funds allocated for 2022. Through the pandemic unemployment payment, PUP, the employment wage subsidy scheme, EWSS, and the Covid restrictions support scheme, CRSS, approximately €17.5 billion has been directed to individuals, families and businesses. These supports worked and showed that we responded in the right way and at the right time. Ireland's ability to respond was strengthened by the solidarity of our European Union partners. We must also acknowledge that our ability to respond was made possible because we managed our affairs well in better times in order to be able to give support at a time of great national difficulty.
Thankfully, we have now entered a new phase where we intend to recover from the pandemic, restore our public services and living standards and repair our public finances. Earlier this year, and very positively, we passed a crucial milestone with the return of many people to workplaces. In many cases, they were doing so for the first time in 18 months. As the recovery increasingly takes hold and citizens get back to some level of normality, the Government must remain focused on our elevated debt levels. At the end of 2020, the stock of Government national debt stood at €217.9 billion, an increase of almost €14 billion. General Government debt as a share of GDP increased to 58.4% of GDP in 2020, an increase of 1.2%. For 2021, it is projected to be 55.2%. General Government debt to GNI*, which is viewed as a more appropriate indicator of the repayment capacity of the economy, increased to 104.7% in 2020. This is an increase of 10% and it is expected to increase again in 2021, reaching 106.2% in 2021.
Public finances can absorb this shock, letting debt rise in order to provide support to the economy, but the debt-to-income ratio must be put on a downward trajectory once circumstances allow. Market participants have given Ireland the benefit of the doubt as a result of the prudent fiscal policies implemented in recent years. Nonetheless, Ireland's public debt-to-income ratio is among the highest in the developed world. By 2024, our stock of public debt will reach just under €240 billion, or a quarter of a trillion euro.
The summer economic statement set out a pathway to meet the core objectives set out in the programme for Government. The strategy was reaffirmed by budget 2022 in October and involves investing in the economy and society and reducing the deficit in order to underpin the sustainability of the public finances. In general terms, the pandemic has entered a new phase, so fiscal strategy must evolve along with it.
The strategy involves three strands: pandemic-related supports will be unwound as appropriate over the course of the remainder of 2021 and during 2022; expenditure will be targeted in priority areas such as capital expenditure in support of climate action; and budgetary policy will be anchored within a medium-term framework via an expenditure rule. The expenditure rule involves limiting core spending growth to around the same level of trend growth in the economy via fixed expenditure ceilings. The headline deficit will be allowed to fluctuate while keeping the ceilings fixed. The strategy will allow the Government to return the public finances to a stable path, while maintaining key investment in public services, particularly public capital investment. Vitally, by next year, the country will only be borrowing for capital expenditure purposes.
The most recent Exchequer returns show a deficit of €7.4 billion was recorded in October, representing an improvement of some €4.2 billion on the same period last year, driven by increases in tax revenue. On a 12-month rolling basis, which is a better indicator of the trend, the Exchequer recorded a deficit of just under €8.1 billion. Tax revenues of €50.9 billion were collected to the end of October, ahead of target by €3.8 billion, or 8.1%, and up by €8.3 billion, or 19.6%, on the same period last year. Income tax and corporation tax continue to perform well, driven respectively by the reduction in unemployment and rising wages, as well as high corporate profitability. Moreover, VAT receipts and, to a lesser extent, excise duties have recovered strongly as the economy opened up.
Total gross voted expenditure stood at €67.5 billion to end-October, which was €2.5 billion, or 3.5%, below profile. The majority of this relates to an underspend in capital expenditure, driven by the extended shutdown of the construction industry in the first few months of this year. Nevertheless, total gross voted expenditure to the end of October was €2 billion ahead of the same period last year, driven by increased spending in the Department of Social Protection, primarily due to the ongoing cost of the PUP and EWSS pandemic support schemes.
The summer economic statement projected that the general Government deficit would be around €20 billion this year. Given the significant over-performance in taxes and the underspend in voted expenditure versus profile, this projection was revised downwards in budget 2022 to around €13 billion, or just under 6% of GNI*, or 3% of GDP, this year.
In conclusion, given the likely continuing impact of Covid-19 on the public finances, it was clear from earlier this year that the making of the planned €500 million annual contribution to the rainy day fund was unlikely and this was signalled in the April 2021 stability programme update and the summer economic statement. As Deputies will know, the rationale behind establishing the rainy day fund in 2019, which was the subject of broad support across the political system, was to accumulate funding that could be deployed in the event of an adverse shock to the economy.
The establishment of this fund and its availability for drawdown in support of budget 2021 in October 2020 have proven to be correct decisions. The drawdown receipt by the Exchequer was used to offset funding requirements arising from budget 2021 and the need to support the increase in Covid-19 related expenditure. It was important that the fund was there to support the Government's Covid response. Crucially, using the rainy day fund meant that the State was able to provide for additional Covid-19 measures without having to borrow more, saving the burden of repayment or refinancing costs on future generations. This motion not to pay the annual €500 million contribution into the rainy day fund, while not preferable, is necessary in order to ensure that the Exchequer has access to funds when they are most needed. The Minister for Finance wants to be in a position to add funds to the rainy day fund at some point in the future in order to be in a position to deal with potential future economic crises but to do so as the public financial impact of the pandemic continues does not make sense. I commend the motion to the House.