Mr. Sebastian Barnes:

The question about the structure of the rainy-day fund is a very good one. The Government set up a rainy-day fund. It made some contributions but delayed them and essentially made very few before the pandemic. It does not currently plan to contribute. We think that is very useful. The Irish economy is inherently quite volatile. We are very reliant on corporation tax and all sorts of changes in the global economy. It is good to have a precautionary fund available. The other issue is that we have become very reliant on these excess corporation tax receipts. A good idea would be to reduce the extent to which spending relies on excess corporation tax.

It raises the question of what to do with the money. One option is to use it to pay down debt. Another option is to use it to build up the rainy-day fund. We have some concerns about the way the Government set up the rainy-day fund. Under the current EU rules, in particular, it is quite hard to draw money down from the rainy-day fund. The design the Government chose did not seem to address that very well. It is an issue to which the Government should return. It should look at the design because the fund could be improved in order for it to have a much better stabilisation role in the economy than is currently the case.