Mr. Seamus McCarthy:

Gabhaim buíochas, a Chathaoirligh.

Bunreacht na hÉireann requires all revenues of the State to be paid into the Central Fund of the Exchequer, unless required otherwise by legislation. Funds are issued from the Central Fund on the authority of the Oireachtas to pay for public services, either through annual voted provisions in the Estimates process, or under standing statutory provisions to pay for what are called "Central Fund services". It is estimated that around 75% of total annual Government receipts and spending passes through the Central Fund.

The finance accounts are prepared each year by the Department of Finance, to present an account of the Central Fund transactions. The format of the accounts has evolved over time, and is unlike that of any other set of annual financial statements that come before the committee. The accounts are prepared on a cash basis, and so represent the actual movements of cash in the year.

The annual Exchequer account presents the cash receipts into and cash issues from the Central Fund. The account is presented together with a set of schedules that analyse the transactions, with a significant amount of explanation and detail set out in footnotes. The financial statements of the national debt of Ireland, which are prepared by the National Treasury Management Agency, NTMA, are also appended as part of the finance accounts.

Chapter 1 of my report on the accounts of the public services is a recurring chapter, which is designed to summarise the transactions on the Central Fund in a more accessible format, and to highlight key trends over time. While budget 2020 had forecast a small Exchequer surplus for the year, the outturn was an Exchequer deficit of just over €12.3 billion, primarily due to increases in voted issues to fund Covid-19 support measures.

As the finance accounts do not include a balance sheet, or a statement of the Exchequer’s financial position at the year end, the chapter on the Exchequer outturn aims to provide a summary position of key assets and liabilities at the year end. I will briefly outline just three of the liabilities that will impact the Central Fund into the future.

As the national debt account shows, Ireland’s national debt at the end of 2020 stood at €219.5 billion, up €12.8 billion from the end of 2019. However, the cost to the Exchequer of servicing the debt continued to fall, and fell by more than 10% in 2020, due to the refinancing of older, higher cost debt.

Liabilities under public private partnerships, or PPPs, are regarded as "off balance sheet" from a general Government perspective. PPP-related commitments outstanding at the end of 2020 totalled an estimated €6.7 billion.

The third point I will draw attention to is that the State is the sole contributor to the Eircom No. 2 pension fund. Towards the end of 2020, the fund’s remaining assets were almost fully exhausted. It is estimated that Exchequer funding of approximately €84 million for 2021 and €86 million a year thereafter will be required to meet the liabilities of the fund to Eircom pensioners.

Pursuant to section 28 of the NTMA (Amendment) Act 2000, the Minister for Finance delegated to the NTMA a range of functions in respect of the Ireland Apple escrow fund, including the production of annual financial statements which are subject to audit by me. These are published separately from the other NTMA accounts. The net assets of the escrow fund were €13.984 billion at year end 2020. This represents a decrease of €36 million from the 2019 net assets balance of €14.02 billion.

The 2020 appropriation account for the Vote for the Office of the Minister for Finance records gross expenditure of just under €36 million.

This is divided between two expenditure programmes. These relate to the costs incurred in respect of economic and fiscal policy, on which the Department spent €23.6 million, and banking and financial services policy, on which the Department spent €12.4 million.

Members may wish to note that the NTMA has provided a number of staff on loan to the Department to work in its banking unit. The related staff costs, and certain consultancy costs, are paid directly by the NTMA and are not recouped from the Department. In 2020, the costs incurred by the NTMA in that regard amounted to €1.8 million. This was in addition to the expenditure on banking and financial services policy recorded in the appropriation accounts.