Dáil Éireann Debate, Tuesday - 30 May 2023
221. Deputy John McGuinness asked the Minister for Finance if, in view of the underlying deficit of approximately €4 billion being recorded on a 12-month rolling sum basis to the end of April this year, and given that this is coinciding with almost full employment in the economy, the public finances are in structural deficit; and if he will make a statement on the matter. [25987/23]
View answerMy Department published estimates of the structural budget balance for 2023 in the Government's Stability Programme Update last month.
The estimates show a modest structural surplus (c.0.8 per cent of GNI*) for this year. However, these are subject to considerable uncertainty as has been highlighted on many occasions by my Department.
It is certainly the case that the economy is at full employment with almost no slack in the economy. Because of this, it will be important to calibrate budgetary policy so as to avoid adding to inflationary pressures.
In recognition of windfall taxes, Government is taking steps to mitigate this risk. €6 billion in windfall receipts have been transferred to the National Reserve Fund and my officials have published a scoping paper on establishing a longer-term investment vehicle to make use of this windfall. Discussions on such a fund are ongoing and I intend to bring a proposal to Cabinet in the coming weeks.
Finally, the best way in which we can maintain our public finances on a stable trajectory and minimise the risks around corporation tax concentration is by pursuing a sustainable budgetary strategy. Government will set out its strategy for Budget 2024 in the Summer Economic Statement, which will be published over the coming period.
