Mr. Seamus McCarthy:

All revenues of the State must 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. The finance accounts are prepared each year by the Department of Finance to present an account of the Central Fund transactions, together with other information, including information about the national debt.

Chapter 1 of my report on the accounts of the public services is a recurring chapter, designed to summarise the transactions on the Central Fund in a more accessible manner and to highlight key trends over time. In 2021, receipts into the Central Fund totalled €82.2 billion. Payments from the Central Fund totalled €89.6 billion resulting in an Exchequer deficit for the year of just under €7.4 billion. At the end of 2021, Ireland’s national debt stood at €237.2 billion. This was up €17.7 billion from the end of 2020. However, the cost of servicing the national debt in 2021, at €3.75 billion, was 20% lower than in 2020 as a result of the National Treasury Management Agency's ability to avail of the prevailing low interest rates over recent years.

Ireland’s contribution to the EU budget was €3.5 billion in 2021. This was €937 million, or 36%, higher than in 2020.

In addition to the impact of normal economic growth, the increase in contribution in 2021 related to the commencement of a new budgetary cycle for the EU, the impact of Brexit on trade levels, a new levy of €146 million related to the level of unrecycled plastic waste in Ireland, and correction of prior year under-contributions of almost €186 million.

A new transaction that emerged in 2021 related to the State's liability in respect of the Eircom No. 2 pension fund. The fund's assets were exhausted in early 2021 and the Exchequer paid €81.2 million into the scheme to meet pension liabilities in the year. The latest actuarial valuation, as at October 2021, calculated the outstanding State liability to the scheme at €1.1 billion.

Chapter 2 reviews the estimated net cost to this State, as at the end of 2021, of the complex and interrelated public measures undertaken in response to the banking and financial crisis that commenced in 2008. We estimated that the State invested a total of €66.8 billion to stabilise Ireland's banks. There have been significant recoveries from the investments, including the proceeds of share sales, dividends, and Central Bank profits, offset by borrowing costs and other expenses. At end 2021, the State expected to recover some further value from its remaining ownership of shareholdings in some of the banks, and some further surplus funds from the National Asset Management Agency, NAMA. Taking all the cash flows into account, the examination estimated that at the end of 2021 the net cost to the State from the banking stabilisation measures was around €45.7 billion. At an individual institution level, the most significant net costs were in respect of the Irish Bank Resolution Corporation, IBRC, and AIB. Their stabilisation had an estimated net cost of €37.3 billion and €13.1 billion respectively.

From previous reports, Members are probably familiar with the origin of the Ireland-Apple escrow fund. Acting as the agent of the Minister for Finance, the NTMA produces annual financial statements for the fund. The net assets of the escrow fund were €13.633 billion at year end 2021. This represents a decrease of €351 million from end 2020. The reduction in net asset value reflected a third-country adjustment amounting to almost €246 million. Within the scope of the EU Commission's decision, this refers to a situation whereby profits subject to tax in Ireland can be reduced if Apple was required to pay taxes in another jurisdiction in respect of the same profits. The remaining €105 million decline in value for the year reflected the prevailing negative interest rate environment, negative yields on bonds, and the fund’s operating expenses.

The 2021 appropriation account for the Vote for the office of the Minister for Finance records gross expenditure of €36.4 million. This was divided between two expenditure programmes. These related to the costs incurred in respect of economic and fiscal policy, on which the Department spent €24 million, and banking and financial services policy, on which the Department spent €12.4 million. The economic and fiscal policy programme expenditure includes €8.2 million spent on the disabled drivers and passengers fuel grant, which, unusually, is administered by the Department of Finance. There were appropriations-in-aid of Vote 7 totalling €1.15 million in 2021, bringing the net spend to €35.2 million. The surplus for the year was €4.3 million and, in accordance with the standard rules for appropriation accounts, this was liable for surrender at year end. I am glad to say I issued a clear audit report in relation to the account.