Seán Haughey
Question:82. Deputy Seán Haughey asked the Minister for Finance the steps he is taking to address the risks around windfall corporate taxes; and if he will make a statement on the matter. [21477/23]
View answerTuesday, 9 May 2023
Questions (82, 101, 116)
Pádraig O'Sullivan
Question:101. Deputy Pádraig O'Sullivan asked the Minister for Finance if he will outline his plans for the surplus of €16 billion estimated for 2024; and if he will make a statement on the matter. [21435/23]
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Richard Bruton
Question:116. Deputy Richard Bruton asked the Minister for Finance how the projected surplus can be harnessed to strengthen Ireland's economic and social foundations. [21511/23]
View answerWritten answers
I propose to take Questions Nos. 82, 101 and 116 together.
This year, a large budgetary surplus of €10 billion is projected and in the absence of 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, almost half of corporation tax receipts this year will be windfall in nature – meaning that they cannot be explained by our economic fundamentals.
When I came into 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.
The National Reserve Fund, which currently holds €6 billion, serves a useful purpose in making resources available to meet unforeseen events. However, I believe a more ambitious approach is needed to meet the fiscal challenges which lie ahead and my Department’s scoping paper explores options in this regard.
Taking this analysis into account, 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.