Matt Shanahan (Waterford, Independent) | Oireachtas source

I welcome the idea of rainy day fund which, in theory, sounds sensible if done at scale and over the long term. The trouble in Ireland is that it rains all the time. The quantum of funding is probably not enough to address even a moderate shower, let alone a downpour. As a ring-fenced savings plan, it has its deficiencies if it is to be raided at every fall-off in national income. This idea has been knocking around for decades and it only works in theory in our political environment. Given we are entering a high interest-rate environment, surely having this money available to invest strategically in Ireland's future would create far better potential than just keeping it in a reserve fund that we can raid because we got the sums wrong.

I am firmly of the view that this political contingency fund would be better used in long-term strategic investments. We have the Ireland Strategic Investment Fund, ISIF, model. It needs to be scaled up to accomplish the impacts we need for economic, environmental and social renewal. It is needed to support SME growth and renewal, to promote prime venture capital to fund a new generation of enterprises, to fund the move to renewables in homes, businesses and public institutions and to build much more housing. In reality, our State is now badly exposed to corporation tax revenue that is concentrated in a handful of multinationals. Have we learned nothing from our overexposure to the construction tax take in 2007? We must do better. This rainy day fund will not be enough to save us if we experience a reversal in the tax take. Our best play here is to invest strategically in Ireland's future.

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