Catherine Connolly (Galway West, Independent)
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40. To ask the Minister for Finance the current balance of the rainy day fund; the ways in which it is intended to use the fund to deal with the costs and consequences arising from Covid-19; the ways in which the fund has been used to deal with the consequences of Covid-19 to date in 2020; and if he will make a statement on the matter. [16305/20]

Paschal Donohoe (Dublin Central, Fine Gael)
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The current balance of the Rainy Day Fund stands at €1.5 billion.

Given the scale of the impact of Covid-19 on the economy, the previous Taoiseach had stated that the Rainy Day Fund will be accessed as part of the Government’s response to the pandemic.

As such, the projections in the Stability Programme Update, published in April, include the assumption that the €1.5 billion in the Fund is transferred to the Exchequer. Given the scale of the impact, it is envisaged that the drawdown will be for the total value of the Fund, i.e. €1.5 billion less the expenses incurred by the National Treasury Management Agency (NTMA) in managing the Fund.

The exact timing of this drawdown remains to be decided, as recent successful debt issuances by the NTMA means there is no immediate need for its drawdown. When the drawdown of the Rainy Day Fund occurs, it will be to mitigate the impact of the exceptional circumstances arising from Covid-19 and it will be in accordance with section 9 of the National Surplus (Exceptional Contingencies) Reserve Fund Act 2019.

The money will be used to offset funding requirements necessitated by the decline in taxes this year and the increase in Covid-19 related expenditure.

Drawdown of the Rainy Day Fund means that the Exchequer Borrowing Requirement for 2020 is approximately €1.5 billion less than would otherwise be the case. Thus, the rationale for having such a Fund – for use in exceptional circumstances such as these – has been strengthened by this crisis.