Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

I want to inform the Deputy that this week I brought the National Surplus (Reserve Fund for Exceptional Contingencies) Bill 2018 to Government and this Bill has now been published. It will be circulated to Deputies in the coming days. It provides the legislative underpinning for the rainy day fund, which will formally be known as the National Surplus (Exceptional Contingencies) Reserve Fund. The timing of commencement of the fund will be contingent on the Bill's passage through the Oireachtas.

The fund is part of a number of measures to help increase the State's resilience to external economic shocks. My intention, as outlined again in budget 2019, is to seed the fund with an initial transfer of €1.5 billion from the Ireland Strategic Investment Fund. I have then provided for Exchequer transfers of €500 million per annum from 2019 to 2023. This will see the fund grow to approximately €4 billion by the end of 2023. In addition, the Bill will provide the possibility of placing windfall tax or other receipts in the fund, where the Dáil by resolution so authorises. The projection of €4 billion by the end of 2023 is contingent on a number of assumptions, namely, that there is a near-zero net carry-cost or return over the period; that there is no event requiring a draw-down; that there are no windfall receipts placed in the fund over the period; and that there is no significant event during the period requiring use of the in-year contingency reserve.

I should explain that the in-year contingency reserve is intended to operate as a potential carve-out from the annual €500 million allocation to the fund. Where, as a result of a natural or other disaster, the Government incurs unforeseeable additional expenditure to mitigate the effects of that event, the payment into the rainy day fund in that year may be reduced by an amount of up to that additional expenditure. I look forward to debating my detailed proposals on Second Stage in the Dáil in the next few weeks.

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