Budgetary Oversight Committee to discuss establishment of Rainy Day Fund with Minister Donohoe

Committee Chairman Colm Brophy said: “A Rainy Day Fund is a tool developed by Governments to act as a prudent buffer against fiscal shocks, usually setting money aside during good economic times to support the economy during downturns. A consultation paper on a Rainy Day Fund was published as part of Budget 2018. The Rainy Day Fund as proposed by the Government will start in 2019 with an initial investment of 1.5 billion euro, with an additional transfer of 500 million euro per annum.

Tomorrow, we will meet with Minister Donohoe to examine the proposals for the Rainy Day Fund in greater detail. The Parliamentary Budget Office recently published a briefing on this topic: http://www.oireachtas.ie/parliament/media/~0358801.pdf

Among the issues we will consider are: is it appropriate to start a fund at this time and if there are opportunity costs to establishing a fund in that the money cannot be spent on current priorities? Should other alternatives be explored such as paying down debt? The design of the fund is very important, in relation to how it is financed, managed and utilised. We will want to know what type of fund is envisaged and if it will be used as a counter-cyclical tool, removing money in good times or will it only be utilised in times of economic difficulty. Other areas of interest to the Committee are: the rules for managing the use of the fund, criteria for deployment of the fund and parliamentary oversight of any decision to draw down funds. We will also want to know how the fund will interact with the Stability and Growth Pact.”

This meeting will start in Committee Room 3, Leinster House at 1.30pm on Tuesday, 31 January 2018. Committee proceedings can be viewed live here.

Committee proceedings can also be viewed on the move, through the Houses of the Oireachtas Smartphone App, available for Apple and Android devices.