Dáil debates

Wednesday, 30 January 2019

National Surplus (Reserve Fund for Exceptional Contingencies) Bill 2018: Second Stage (Resumed)

 

5:50 pm

Photo of Michael D'ArcyMichael D'Arcy (Wexford, Fine Gael) | Oireachtas source

The Bill legislates for what has been termed the "rainy day fund", a commitment in A Programme for a Partnership Government and an important element of the Government's strategy to put our national finances on a sound footing while building resilience to external shocks, and there can be external shocks for which none of us is prepared. That is what the Bill is for.

A number of Deputies questioned the very purpose of the Bill and claimed that international experts have recommended other courses of action.

Let me be clear that all the international and national experts have endorsed the establishment of a rainy day fund. Given our current strong economic performance, we should make provision now to address the effects of a potential future crisis that will be outside our control. This fund will be an economic buffer available for drawdown in the event of a sharp economic downturn. This will also allow the Government of the day to mitigate the effects of that downturn. It allows capital investment and current expenditure to continue even if there is a sharp reduction in tax receipts.

A number of Deputies referred to the level of indebtedness of the nation. Ireland's level of indebtedness is somewhere between €200 billion and €210 billion. Everybody says it is the fault of the banks. The Sinn Féin Deputies also said that. For clarity, in 2007, the national debt was approximately €40 billion. The figure for the banks is €30 billion. The remainder is what we borrowed from partners such as the European institutions and other countries which directly funded us. We relied on the kindness of strangers. The remaining amount of approximately €150 billion-----

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