Dáil Éireann Debate, Thursday - 24 October 2019
65. Deputy Michael McGrath asked the Minister for Finance if investment in the rainy day fund does not impact the general Government balance but does impact the Exchequer balance; if the indicative nominal budgetary package outlined in table 6 is after the funds for the rainy day fund have been invested; and if he will make a statement on the matter. [43990/19]
Amharc ar fhreagraThe Deputy is correct that annual transfers to the Rainy Day Fund will not impact on the General Government Balance, as they are considered a within government transaction and not counted as general government expenditure. However, such transfers will represent expenditure from the Exchequer account and will, hence, impact the Exchequer balance.
As I outlined on Budget day, a one-off transfer of €1.5 billion from the Ireland Strategic Investment Fund (ISIF) will be made to the Rainy Day Fund. As with the transfers from the Exchequer, the transfer from ISIF does not impact the General Government Balance. However, given that Budget 2020 was designed around the assumption of a no-deal Brexit, it was decided not to transfer €500 million to the fund from the Exchequer in 2019 or 2020. This was the prudent course of action considering the uncertainty which we face, as it ensures resources are available to put in place the supports to protect our economy from the impacts of Brexit.
As outlined in Table 9 of the Economic and Fiscal Outlook, a Brexit contingency of some €1.2 billion has been included in the budgetary arithmetic for 2020 and this is reflected in the projected Exchequer deficit of €1.6 billion for that year. Were the €500 million transfer to the Rainy Day Fund to be made, this would increase the Exchequer deficit by this amount, though there would be no impact on the General Government Balance.
