Dáil Éireann Debate, Tuesday - 6 November 2012
202. Deputy Kevin Humphreys asked the Minister for Finance the current Exchequer account balance; the estimated cost of maintaining such a large amount of cash on hand; the plans for the use of these funds for 2012, 2013 or 2014; and if he will make a statement on the matter. [47327/12]
View answerIt has been clarified with the Deputy that the question refers to the cash balances held in the Exchequer account and the use to which these will be put. The Exchequer had available cash balances of €22.5 billion at end-October 2012. Funds in the Exchequer are used for the ongoing payments necessary for running the State. The April stability programme update, SPU, estimated that the cumulative Exchequer deficit over the years 2013-2014 would be close to €25 billion. In addition to these day-to-day costs, there are large debt redemptions that are scheduled from early 2013, including a €5.6 billion bond repayment in April 2013 and a €7.6 billion bond repayment in January 2014. The continuing budget deficits and debt redemptions must be adequately and prudently funded.
The cash reserves held in the Exchequer come from a number of different sources such as tax revenue, non-tax revenue, and borrowings by the State from the market and under the EU/IMF Programme. As the Exchequer is an omnibus account, it is not possible to derive a single robust cost figure in relation to the balances maintained. A cost, for example, of not maintaining an adequate and prudent cash balance would include the risk that the Exchequer would be unable to meet its obligations and that market interest rates would possibly be higher than would otherwise be the case due to the perception that the State had a precarious liquidity position.
Exchequer cash reserves are an important component in bolstering investor confidence in Ireland as it continues on the path to full independent market access at sustainable interest rates. The EU/IMF programme ends in 2013 making such market access of critical importance.
