Michael McGrath (Cork South Central, Fianna Fail)
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Ultimately, that question, which we will come to consider in more detail in section 26, is a matter of judgment. The criteria are laid out within section 26.

Factors will have to be considered such as the general Government balance at the point in time, corporation tax receipts, GDP, employment, unemployment and any other such matters that IFAC and then the Minister in his or her assessment consider appropriate. It is very broad in the scope of potential issues that can be considered. It is a matter of judgment. It is appropriate that that flexibility is there, essentially, for the Government of the day to make that decision.

The Deputy asked about the potential scenarios around OECD and the BEPS agreement. There is uncertainty about pillar 1. Will it be agreed? When will it be agreed? When will it be implemented? Will a critical mass of countries implement it by 2026? Nobody can give a definitive answer to that question.

With regard to the non-core expenditure, which we will have an opportunity to go through later in the evening at the Committee on Budgetary Oversight, it is an assumption that the Government has made for the purposes of the stability programme update. Certainly, a substantial proportion of those costs are likely to continue for the foreseeable future, although I would point out that we were in a position where the non-core expenditure was at a high of over €15 billion at the height of Covid. It is now €4.5 billion. As the Deputy acknowledged, much of that relates to the consequences of the war in Ukraine and the costs of international protection. There is provision for Covid-related spending of approximately €1.25 billion which, again, had been over €15 billion.

There are still legacy issues in terms of Covid and real costs that have to be met arising from that provision. Later this year, we have to set out a medium-term fiscal plan under the new EU governance framework. There is no distinction between core and non-core. Over the coming months, there will be work by the Minister, Deputy Donohoe, and his officials, in particular, to arrive at a view as to the likely level of what we called non-core, appropriately, until now. What is the appropriate provision for that over the period ahead? That has to be considered in the context of the summer economic statement and in even greater detail in the context of the budget in the autumn. That feeds into the five-year medium-term plan we submit to the European Commission. There is no longer a distinction between core and non-core under that economic governance framework. It will fall to a new Government, when it is formed, to change the medium-term fiscal plan if it so decides.

On the question of a deficit, the Deputy is right in pointing to the forecasts on the Exchequer side from 2026 onwards. The NTMA has adopted a conservative but professional approach to managing debt and built up a significant buffer in terms of cash and liquid financial assets, which, at its discretion, can be used in the period ahead. We borrow on an ongoing basis to refinance existing debt. It is good practice for the NTMA to remain in the market and maintain the relationships it has in terms of bond issuances. We expect that to continue. Even if the Government was running consistent surpluses, I would support the continuation of that practice. It maintains experience, corporate knowledge and intellectual capital within the system, which is important.

The NPRF was set up in the 1990s and allowed borrowing to fund it over its existence. The design of these funds allows more significant control and decision-making power to the Minister and Government. If it is the conclusion of the Government of the day that an Exchequer deficit of a few billion euro that cannot be reasonably met from existing resources held by the NTMA means it is no longer prudent to invest in the fund and is tantamount to a significant deterioration, I am satisfied the enabling infrastructure is in the legislation to facilitate such a decision. Where you are running modest deficits, such a decision is not required. That is my view; another Minister might take a different view. The Bill provides the flexibility to make such a decision.