Mr. Seamus McCarthy:

Bunreacht na hÉireann requires all revenues of the State to be paid into the Central Fund of the Exchequer unless required otherwise by law. Around three quarters of total annual Government receipts and spending passes through the Central Fund. The finance accounts are prepared each year by the Department of Finance to present an account of the Central Fund transactions. The Exchequer account presents the cash receipts into and cash issues from the Central Fund. The account is presented together with a set of schedules that analyse the transactions. The financial statements of the national debt of Ireland, which are prepared by the National Treasury Management Agency, are also appended as part of the finance accounts. For the 2022 accounts and onwards, the sundry moneys account is now included in part 3 of the finance accounts. This account is used to hold funds on a temporary basis until final accounting instructions are received.

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 and to highlight key trends. In 2022, the Exchequer surplus was just under €5 billion. This represents a significant improvement in the Exchequer balance from the deficit of €7.4 billion reported in 2021. The improvement of almost €12.4 billion was driven largely by increases in tax revenue in 2022 and a decline in Covid-19-related expenditure.

The finance accounts do not include a balance sheet or a statement of the Exchequer’s financial position at the year end. The key liability is in relation to Ireland’s national debt, which stood at €231.2 billion at the year end. This represented a decrease of 2.5%, or almost €6 billion, during 2022. The cost of servicing Ireland’s national debt in 2022 was €3.84 billion. This was up 2.6% compared to 2021, reflecting the impact of rising interest rates.

Chapter 2, on the reporting of Ireland’s EU transactions, examines the contributions to and receipts from the European Union during 2022. The chapter also assesses how receipts from the EU are accounted for in departmental appropriation accounts and in the finance accounts. Since 2013, Ireland has been a net contributor to the EU budget. Ireland’s contribution in 2022 was €3.6 billion and is expected to rise to almost €4.5 billion by 2027. I drew attention to the funding of €915 million available to Ireland under the EU recovery and resilience fund. Even though the national plan for the drawdown was approved in September 2021, Ireland was one of just a few member states that had not applied for a drawdown by July 2023. I understand that an application was lodged for drawdown in September 2023. The report recommends that the Department of Finance’s annual report on Ireland’s transactions should be expanded to provide better information on Ireland’s overall performance in managing EU funding. Availability of enhanced information in the appropriation accounts would facilitate the Department of Finance in improving the scope of its reporting on EU transactions.

Chapter 24 provides an update on the performance of the Ireland Apple escrow fund. At the end of 2022, the net assets of the fund were €13.374 billion. This represents a decrease of €259 million euro from end-2021. The decline in the value of the fund’s net assets was primarily due to movements in the global market for fixed income securities. Since the publication of the report, the Advocate General at the European Court published his opinion on the Apple case. The Accounting Officer will be able to update the committee on this.

I am required by law to include a chapter on the Irish Fiscal Advisory Council’s financial statements in my annual report. There are no significant matters in that regard to draw attention to this morning.

I will conclude with the appropriation account for Vote 7 - Office of the Minister for Finance.

The 2022 appropriation account records gross expenditure of €40.39 million divided between two expenditure programmes, namely, the economic and fiscal policy programme, on which the Department spent just under €25 million, and the banking and financial services policy programme, on which the Department spent €15.4 million. In addition, the National Treasury Management Agency, NTMA, incurred costs of €4.4 million in respect of staff and activities of the shareholding and financial advisory division of the Department. The surplus on Vote 7 for surrender at year end was €3.4 million, which was after allowance for carryover of €100,000 to 2023. Both the Vote and the finance accounts received clear audit opinions.