Bernard Durkan
Question:184. Deputy Bernard J. Durkan asked the Minister for Finance the degree to which he remains satisfied that this country’s finances are on a firm footing; and if he will make a statement on the matter. [51758/23]
View answerThursday, 23 November 2023
Questions (184)
Written answers
The latest Exchequer returns, for end-October, presented a mixed picture of our public finances. The underlying resilience of our economy is reflected in the steady growth in income tax and VAT receipts, but, as the Deputy will be aware, corporation tax fell for a third consecutive month and now stands some €0.4 billion behind its end-October 2022 position.
I have long warned that "windfall" corporation tax receipts, while welcome, are an inherently volatile source of revenue and are not a suitable basis on which to build permanent spending commitments. Government’s fiscal strategy is predicated on the assumption that a large proportion of the significant rise in corporation tax seen in recent years is windfall in nature: in other words, these receipts are not linked to the domestic economy. This represents a clear vulnerability to the sustainability of our public finances.
Government has taken important steps to mitigate this vulnerability: on Budget Day, I announced the establishment of two new long-term funds, the Future Ireland Fund and the Infrastructure, Climate and Nature Fund , that will invest these windfall receipts to assist with capital and climate-related projects and to prepare for future structural fiscal challenges that we know are on the horizon.
Of course, the best way to ensure that our public finances remain on a positive trajectory over the medium-term is by continuing to pursue a balanced and sensible budgetary policy, as set out in Budget 2024 .
Question No. 185 answered with Question No. 127.