Dáil Éireann Debate, Tuesday - 7 July 2020
201. Deputy Ged Nash asked the Minister for Finance his plans for a national recovery fund; if he plans to use windfall gains as identified in the programme for Government to reduce borrowing requirements; his views on whether such windfall gains would be more appropriately utilised as part of a national recovery fund; and if he will make a statement on the matter. [14597/20]
View answerIt is intended that, beginning in 2020, the Recovery Fund will be available for three years and will consist of three primary elements:
- Infrastructure development - focussing on areas such as housing, retrofitting and transport to maintain employment and lay the foundation for future employment.
- Reskilling and retraining - for those who have lost their jobs as a result of the pandemic and are unable to return to their previous employment, so that they can receive the skills they need to attain new opportunities.
- Support investment - measures to help Irish companies access credit and capital to support the retention and creation of jobs.
Measures such as these will have a significant fiscal cost and will be additional to the cost of the wide range of measures introduced to-date. As a consequence of this support, as well as the fall-off in taxation receipts, the general government deficit is expected to be in the region of €23-€30 billion this year. As I have said previously, it is entirely appropriate that Government runs a deficit and increases borrowing to support the economy in these unprecedented circumstances. However, borrowing at this scale cannot go on indefinitely and once circumstances allow, we must return the public finances to a sustainable path.
a As the Programme for Government sets out, windfall gains - such as they may arise - will be used to reduce the overall level of borrowing. For example, the first tranche of the NAMA surplus, some €2 billion, was returned to the Exchequer last month. The NAMA transfer means that we will borrow €2 billion less this year than would otherwise be the case. Similar transfers, such as the proceeds from the liquidation of the Irish Banking Resolution Corporation or the sale of the state shareholdings in the banks, will also be used to reduce our borrowing requirements. Given the likelihood of continued fiscal deficits over the medium-term, and the level of our existing stock of debt, such an approach is the most effective strategy for use of such receipts.
