Fintan Warfield (Sinn Fein) | Oireachtas source

As has been mentioned a number of times, this Bill provides for the establishment of two funds - the future Ireland fund and the infrastructure, climate and nature fund - to support State expenditure from 2041 in a sustainable and consistent manner. However, there are risks to these proposals that could be disastrous in terms of the State’s ability to spend and respond to the housing and health crises as well as meet our climate targets. The serious flaws with these proposals mean that Sinn Féin will not be supporting this Bill today.

The future Ireland fund is being established to help to deal with future expenditure pressures, including ageing, climate, digitisation and other economic and fiscal challenges. Annual contributions will be made to these funds – to the future Ireland fund from 2024 to 2035, after which future contributions can be provided through a Dáil resolution. There is no limit to the potential size of this fund. For each year from 2024 to 2035, 0.8% of GDP will be invested in the fund, with approximately €4.1 billion also to be transferred from the dissolution of the national reserve fund in 2024. Taking account of annual contributions, growth in GDP and potential return from investments, the fund has the capacity to grow to €100 billion by 2035. Here is the fundamental problem with this legislation. At present, we have a severe housing and homelessness crisis which is forcing young people to emigrate in their thousands. Housing is the number one issue facing our country. The housing crisis is also undermining our ability to attract investment and employment and is hampering growth. Yet, as a result of this proposed legislation we could potentially face a situation where, in any given year, the Government would be obliged, in law, to transfer billions of euro into the future Ireland fund without regard to the housing and social needs of our country.

Under this Government, the rate of home ownership is falling and homelessness is rising and an entire generation is locked out of affordable accommodation. There is also a need to significantly increase public investment and the capacity of our health service and hospitals, which are also in crisis. Under this proposed legislation there is fear and a real possibility that despite the need to increase public investment in housing, health and the economy, the Government would be transferring billions of euro into this fund and risking further under investment in those key areas.

The stated purpose of the climate, infrastructure and nature fund is to make resources available in a future downturn to support expenditure through the fiscal cycle. Under section 21, it will allow for the drawdown of funds not exceeding €3.15 billion between 2026 and 2030 for designated environmental projects. That is an average of €630 million per year, which just shows the lack of ambition from the Government to meet its greenhouse gas emissions targets.

It is also hard to believe that the legislation makes no provision for the drawdown of money from this fund to invest in housing. Regardless of how well or not public finances are doing, the housing crisis will require substantial investment in social and affordable housing for years to come.

I want to talk for a moment about corporation tax. As recently as 2022, I think, the Department was talking about a fall off in corporation tax revenues. The proposed establishment of the future Ireland fund and the infrastructure, climate and nature fund has taken place in the context of significant growth in corporation tax receipts in recent years and a recognition that a substantial proportion of these receipts are potentially volatile and windfall in nature. We have seen a significant increase in the corporation tax revenue in recent years but only ten companies account for more than 50% of all corporation tax revenue. Foreign multinationals paid 87% of all corporation tax receipts in 2022. Sinn Féin has consistently warned that the use of this revenue must be treated carefully. Sinn Féin has also said that the establishment of a sovereign wealth fund providing funding for future challenges and current crises makes good use of the significant growth of corporation tax revenues. While we remain supportive of a sovereign wealth fund, Sinn Féin will be opposing this legislation. Under these provisions, we could face a situation where the public finances record a surplus - which could be modest - while at the same time, our people continue to face acute housing need and chronic housing shortage. Yet, under this legislation, the Government would be obliged to transfer billions of euro into this fund without regard to the housing and social needs of our people. That is a fundamental problem with the way this legislation has been designed and drafted. Payments into this fund and by extension, the expenditure policy, will be tethered to a metric - gross domestic product, GDP, - that is universally acknowledged to be an inappropriate measure for the Irish economy. Yet, it is GDP that will determine the amount of money - the billions of euro - the Government must transfer into the fund, possibly at the expense of the investment in housing, health and other infrastructure. What is the basis for the decision that GDP is the appropriate metric for transfers into this fund, rather than gross national income, GNI?

It is inevitable that the economy and the position of the public finances will change. Under this legislation we could face a scenario whereby, despite the need to increase public investment in housing, infrastructure and the economy, the Government would be required by law to transfer an amount equivalent to the entire Government surplus into this fund. Hamstrung by this legislation and restricted by its rigid requirements, the State would risk under investment and undermining our economy and its prospects, so we will be opposing this legislation today.