Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

I thank the Deputies. I want to give the NTMA the capacity to earn the best possible financial return for the State from the investment of the funds we will entrust it with. We have to go back to the primary purpose of setting up this fund. I have looked at the trends and data and the challenges we will face in coming years. In the absence of these funds, and to a lesser extent even with these funds, future Governments will face extremely different decisions to provide for the cost, for example, of an ageing population. We all know what the statistics are. A recent report, Health in Ireland Key Trends 2023, points out the population grew by 14% between 2014 and 2023. The largest change we have seen is in the over-65 age group which increased by 37% between 2014 and 2023. We know the direction of travel on the age dependency ratio. The ratio of the population aged 65 or over, relative to the population aged 20 to 64, is expected to increase by 30% between now and 2050.

That is not to say people aged over 65 will not make an economic contribution, of course they will. Many of them will continue to work beyond that age, nonetheless the overall conclusion we can reach from the data is really stark. It is estimated that age-related expenditure will increase from approximately 22% of GNI* in 2022, to approximately 28% of GNI* in 2050. That is an increase of 6% and we have many more statistics to back this up. I want to give the NTMA the ability to get the best return for the State it possibly can. I note the recommendation from the budgetary oversight committee among others, which recommended that the fund should be solely invested outside Ireland to protect against low-key inflation and lobbying. We are giving the NTMA the discretion to invest inside or outside the State. However, the key objective is that this fund will build a financial asset to generate long-term returns that will offset costs coming over the years ahead. Were we not to do that, these costs would have to be met from existing resources which would mean less money in the future to invest in the things people are calling for the Government to provide.

I think this is the right policy for all of those reasons. It is designed to get the maximum return. The NTMA has considerable expertise in this regard and will design the investment strategy within the parameters of the legislation before the committee this evening.