Mr. Seamus Coffey:

On the opening points about references to funds and the use of moneys, most of the contributors referred to them indirectly in the context of the Government running surpluses, which is the most important outcome. The secondary or subsequent step relates to what happens to that money. Yes, two funds have been established and they could be useful savings vehicles. The level being contributed in 2024 will be about €6 billion between the two funds, but the Department of Finance's own estimates for the windfall corporation tax receipts are about double that, so even if we are saying we are setting money aside, we are setting aside only half of what the Department of Finance estimates to be level of windfall corporation tax receipts, which continue to rise.

The funds are useful and when the next downturn comes, they should see the State with a good capacity to absorb it. In Ireland, we have seen both sides of the fiscal policy coin, including the unsustainable fiscal expansions that led to difficulties in the 1980s and post 2008, when the recession was prolonged and deepened because of the fiscal policy that was followed when it hit. On the other side of the coin, as we saw during Covid and with the cost-of-living crisis, the public finances were able to step in and the State had a strong enough balance sheet to absorb some of those costs. When we shut large parts of the economy during Covid, the implications would have been far more catastrophic if the Government had not had the financial capability to step in and fill the hole that was created. We have seen the importance, therefore, of the public finances on both sides, that is, when we get it wrong, which led to significant problems, and when we get it right. The issue now is that we face opportunities on the tax side. Having a tax coming in at such high levels is a good problem to have, but it is one that can create problems down the line.

If we pump this money out into an economy that is performing well, we could spend a lot of it, perhaps build up some permanent commitments, see prices rising now, and then possibly having to reverse, if the windfall nature of these corporate tax receipts was to be welcomed. The key from the fiscal council perspective is the impact the budget is having on the economy. We are in a surplus, and in the conditions we find ourselves in now, it is absolutely appropriate. The use of that into different type of funds is subject to some analysis, but that is the secondary step. The key is to get the balance right first. Perhaps we are not quite there, given the extent and estimated size of the corporate tax receipts. The economy is performing very strongly now. If both of those were to reverse, we would not be in a position perhaps to be making contributions to these funds and could see this underlying deficit opening up. We welcome that the overall position has been reasonably positive. We see the merits of running a surplus and can see the merits of putting it into those funds. It is a matter of getting the overall position right rather than the design and nature of the individual funds.