Gerry Horkan (Fianna Fail) | Oireachtas source

I thank the Minister of State for a comprehensive opening statement and I do not intend to repeat all the various measures and provisions included in the Bill but I want to say a few words about it. As a party, Fianna Fáil will be supporting this Bill which would effectively establish the rainy day fund. It was a fund that we proposed ourselves as a party back in 2015 and in early 2016 it was negotiated into the confidence and supply agreement that this Government has with Fianna Fáil. It was then included in A Programme for a Partnership Government as a result and it was included and committed to by the then Minister for Finance, Deputy Noonan, in the summer economic statement of June 2016. The Taoiseach, in his leadership campaign, said that he intended to raid the fund in June 2017 but in fact it had not been established at that stage.

In late 2018 it went through the Dáil and it is now coming into the Seanad to be established. I welcome that and it is a prudent and sensible thing to do at a time when our Exchequer returns are improving and positive to allocate some funds and build a bit of resilience because past experience has shown us that we will not always be on the up and we will not always be doing well. Shocks happen, though we wish they did not and it would be great if they did not. Sometimes they do not happen for long time. However, what goes up generally eventually comes down.

At the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach not that long ago, one of the chief executives of one of the banks said that we are closer to the next recession than we are to the last one. In recent days the Irish Fiscal Advisory Council has pointed out that there are challenges and that as a State we have been quite lucky with the interest rate on the national debt and that we have been lucky to receive such a windfall in corporation tax payments. Bring them on, and the more we have the better, but the Irish Fiscal Advisory Council pointed out that of the €10 billion or so, between €3 billion and €6 billion of it could be at risk. I know Members may disagree with that but this is the Government's own watchdog saying it. It is not some critic or Opposition spokesperson just throwing it out there.

It is a prudent and sensible measure to do what we are doing. We are a small, open economy and we are particularly vulnerable to global changes. It is fair to say that there may be movements in the Organisation for Economic Co-operation and Development, OECD, and other places to deal with digital taxation, to deal with how the world taxes its resources and to deal with how those taxes are allocated, whether they are based on where the value was created, which would often be here, or whether it is based on where it is consumed, which would often not be here and that brings challenges.

Ironically, maybe the base erosion and profit shifting, BEPS, process and other processes have meant that we have been beneficiaries of intellectual property being moved into Ireland and taxed. As a result of that, we have been beneficiaries but equally, if it can move in that easily maybe it can go as easily. I do not wish it to and I would hope that we manage to keep it but it is an important feature to have. I know there are some people who will criticise that approach and say we should spend all the money now but it is a time of relative good fortune in our economic position, with interest rates historically low, with the national debt being much cheaper than it normally is to service, and with our corporation tax receipts being much better than they have been in a long time, so it is important.

However, we have challenges as the Minister of State knows and most of the Members of this House appreciate the challenge of digital taxation and receipts and so on as well as the challenge of Brexit and potentially a no-deal Brexit, which is not something any of us want to see, in this country at least. It is a possibility, however. Senator Feighan of the Minister of State's party made reference on the Order of Business yesterday to having been in Westminster on Monday. He referred to the level of uncertainty and said that he was more concerned about a no-deal Brexit now than he had ever been. It is not something any of us want to see but it is something we must prepare for.

I welcome the mechanisms that are there to lock in that money and that it is not easily squandered or raided. There are mechanisms in place, which the Minister of State outlined, to make sure the money is only used for what it is supposed to be used for. However, it does make sense that we allocate this money in the next few years and bring it up to a figure of €8 billion. The Minister of State referenced a Committee Stage amendment from Fianna Fáil that said that cap can be moved and that if we were doing exceptionally well it could be decided that a little bit more would go into the fund, or equally, if there were times when it was really needed the money could be reduced. It is a good idea to put in €1 billion over the next few years and then €500 million or whatever it is in each of the following years.It is a substantial amount of money - €8 billion. We sometimes forget the size of it. We have a national debt of almost €200 billion, but €8 billion is a very significant amount of money. It could go a long way towards providing a bit of resilience or wriggle room if there was a time, as there was in the living memory of all of us, of shock or challenge. Whether it be global recessions, banking crises or whatever, we hope we have built-in mechanisms that will never allow those situations to develop in the same way again, but shocks will happen. We are dependent on a small number of corporations for a significant proportion of the corporation tax and if any one of those companies was to fail or not do well, or even relocate out of this jurisdiction, we could quickly have a significant hole, which is not something I hope for.

I wish the Bill swift passage through this House and into enactment. I thank the Minister of State for being here today. It is an important piece of legislation. It is an example of new politics working well.