Mr. Seamus Coffey:

Yes, there are various proposals on how Ireland could or should establish a rainy day fund. I favour looking at the amount of corporation tax receipts we collect and setting a certain amount of that aside. The contributions to the fund could be based on the corporation tax receipts. I have a previous proposal that looked at setting aside 50% of the corporation tax that comes from the multinationals. That would offer two things. It would offer savings in future and if there was volatility at least half of it would be taken out by setting those revenues aside. We cannot be guaranteed that these revenues would flow into the future. When we do need them to achieve other economic objectives then the fund will be there. I see advantages in looking at an annual budgetary process, stripping out some of the corporation tax receipts from the multinational sector and operating a balanced budget on the basis of what is left. That is actually saving the money.

Previously, we had a savings fund in the last decade, the National Pension Reserve Fund. The money was not necessarily taken out of the budgetary process. A commitment was made to make contributions. However, it all remained within the general Government sector. The Government deficit and balance itself was calculated on the basis of spending money outside of the general Government. I would take those funds out of the budgetary process and balance the Budget outside of that. I made that proposal back in 2015 and there have been variations in the rainy day fund since. The key issue is to consider what the rainy day fund is to achieve. The proposal I outlined would be about treating the corporation tax receipts as a sort of temporary bonus, like some countries do with setting aside oil revenues. Alternatively, a rainy day fund can be used for counter-cyclical purposes. Money can be taken out of the economy when it is performing well. It does look like the current proposal is going in that direction, if not to a huge degree.