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

I will read a short speaking note on the section before I deal with the specific question. The section provides the mechanism to reduce or pause the annual payments to the future Ireland fund. It is important to provide the option for payments to be either reduced or not made into the fund when there are negative fiscal or economic conditions.

While the analysis of whether there is a deterioration and the extent of that deterioration is a matter for the Irish Fiscal Advisory Council and the Minister for Finance to determine, ultimately, the decision to make the proposal on whether to halve or halt the payment to the fund is a matter for the Minister in line with the relevant procedures.

Section 9(1) provides that the Minister for Finance may recommend to the Government following consultation with the Minister for Public Expenditure, National Development Plan Delivery and Reform to reduce the payment to the fund to 0.4% if he or she considers there has been or is likely to be a deterioration in the economic or fiscal position of the State. To put some numbers on this, in the context of the 2025 figures, halving the contribution would mean making a payment of approximately €2 billion and would mean that the further €2 billion would not be paid into the fund. This would provide the Exchequer with an additional €2 billion while maintaining a level of saving. This type of decision will be subject to the passing of a resolution by the Dáil under section 9(2).

Section 9(3) makes it clear that the full 0.8% payment is not paid into the fund when such a resolution has been passed and that the Minister will instead transfer 0.4% to the fund in the subsequent year. Section 9(4) mirrors section 9(1) but here the Minister determines that there is a significant deterioration in the economic and fiscal position of the State such that it would not be appropriate to make any payment into the fund. A similar process is provided for in section 9(5) and (6) providing for the passing of a Dáil resolution and preventing the Minister making any payment into the fund in the subsequent year when such a resolution has been passed.

The Deputy raised two key issues. One is about the assessment. If I had sought to tie in a tighter manner the hands of future Governments, I think the Deputy would rail against that very strongly. I have not done that. I know we will come to sections 25 and 26. It involves a deterioration or significant deterioration in the economic or fiscal position of the State. The fiscal position of the State will have to have regard to the fiscal plans of the Government concerned and that will be a very direct part of the consideration of whether or not those plans will result in a deterioration or not. That is adequately provided for in section 25 in terms of the Irish Fiscal Advisory Council's assessment and then section 26 by the Minister. It also allows the Minister to consider any other such matters as the Minister considers appropriate, so it is actually quite broad in its nature and gives the Government of the day considerable latitude. There is the option to pay additional funding in. On the question of why zero, half or the full, it is my view that it is important to have a solid structure and to have as much certainty as possible. The Deputy made the point that there is no certainty and that there are only three options and asked what would happen if there was €1 billion, €3 billion or €5 billion. That would be a very open annual process and annual decision and I would not have confidence in that circumstance that it would actually happen over the years ahead with such a structure. This lays out a formal structure. Decisions have to be made. There is flexibility as to which decision you make. This is appropriate. That is one for the Government of the day. If the Minister is deciding every year to put €0.5 billion in this year and €1.5 billion in next year given the known pressures and stresses of managing a budgetary, I would be concerned that this project, which I believe is a very important one strategically for the State, would not progress in the manner I believe it needs to. I would also make the point that all the risks are not to the down side. There are many down side risks. A lot can happen. Who would have thought six or seven years ago that we would have had to deal with everything we have had to deal with over the past number of years? There are up side risks as well and things could go better than expected so we have to prepare for the worst but also anticipate that there could be up side risks when it comes to even some of the issues we discussed this morning.