Michael McGrath (Cork South Central, Fianna Fail)
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63. To ask the Minister for Finance if the €500 million intended for the rainy day fund in 2019 will be available in 2019 and 2020; if it makes up part of the €1.2 billion Brexit package; and if he will make a statement on the matter. [43988/19]

Paschal Donohoe (Dublin Central, Fine Gael)
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In my Budget 2020 speech, I set out that a disorderly Brexit is now the baseline scenario for budget planning purposes, and therefore a budget deficit is in prospect. On that basis, I decided that there will be no transfer of €500 million from the Exchequer this year to the National Surplus (Exceptional Contingencies) Reserve Fund (the Rainy Day Fund).  However, as set out in my Budget speech, I will be transferring the previously earmarked €1.5 billion from the Ireland Strategic Investment Fund (ISIF) as this is not money that will have to be borrowed as it is currently in the ISIF.  

I also set out that the funds transferred to the Rainy Day Fund can be deployed in the event that the economic impact of a disorderly Brexit is larger than assumed.  The €500 million of Exchequer funding not being transferred to the Rainy Day Fund this year will remain as Exchequer cash balances and therefore will be used to meet the Exchequer funding requirement, such as for public spending priorities including Brexit related spending.

Michael McGrath (Cork South Central, Fianna Fail)
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64. To ask the Minister for Finance if a decision has been made on the €500 million intended for the rainy day fund in 2020; if he still plans to invest €500 million in the rainy day fund in 2020; if not, if the €500 million forms part of the €1.2 billion Brexit package; and if he will make a statement on the matter. [43989/19]

Paschal Donohoe (Dublin Central, Fine Gael)
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I have decided that there will be no transfer of €500 million from the Exchequer in 2020 to the National Surplus (Exceptional Contingencies) Reserve Fund (the Rainy Day Fund). The €500 million of Exchequer funding not being transferred to the Rainy Day Fund will remain as Exchequer cash balances and therefore will be used to meet the Exchequer funding requirement, such as for public spending priorities including any Brexit related spending. 

For information, I should set out that this year I will be transferring the previously earmarked €1.5 billion from the Ireland Strategic Investment Fund (ISIF) to the Rainy Day Fund.

Michael McGrath (Cork South Central, Fianna Fail)
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65. To ask the Minister for Finance if investment in the rainy day fund does not impact the general Government balance but does impact the Exchequer balance; if the indicative nominal budgetary package outlined in table 6 is after the funds for the rainy day fund have been invested; and if he will make a statement on the matter. [43990/19]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Deputy is correct that annual transfers to the Rainy Day Fund will not impact on the General Government Balance, as they are considered a within government transaction and not counted as general government expenditure. However, such transfers will represent expenditure from the Exchequer account and will, hence, impact the Exchequer balance.

As I outlined on Budget day, a one-off transfer of €1.5 billion from the Ireland Strategic Investment Fund (ISIF) will be made to the Rainy Day Fund. As with the transfers from the Exchequer, the transfer from ISIF does not impact the General Government Balance. However, given that Budget 2020 was designed around the assumption of a no-deal Brexit, it was decided not to transfer €500 million to the fund from the Exchequer in 2019 or 2020. This was the prudent course of action considering the uncertainty which we face, as it ensures resources are available to put in place the supports to protect our economy from the impacts of Brexit.

As outlined in Table 9 of the Economic and Fiscal Outlook, a Brexit contingency of some €1.2 billion has been included in the budgetary arithmetic for 2020 and this is reflected in the projected Exchequer deficit of €1.6 billion for that year. Were the €500 million transfer to the Rainy Day Fund to be made, this would increase the Exchequer deficit by this amount, though there would be no impact on the General Government Balance.